Corporation tax: paying in instalments
Companies are required to pay corporation tax either:
• nine months and one day after the end of the accounting period (small companies); or
• by quarterly instalments (large companies)
A company is considered large for a corporation tax accounting period if its taxable profits are more than £1.5m but not more than £20m.
Where a company first generates profits of more than £1.5m, its requirement to pay quarterly instalments will normally be deferred to the following accounting period.
A large company with a 12 month corporation tax accounting period will pay instalments:
• Six months and 13 days from the start of the accounting period;
• Three months after the first instalment;
• Three months after the second instalment; and
• Three months and 14 days from the end of the accounting period.
HMRC corporation tax instalments are calculated based on your estimated corporation tax liability for the accounting period.
HM Revenue and Customs will charge interest on late and underpaid instalment payments from the due date for the instalment.
Penalties may be payable for deliberately failing to make instalment payments or deliberately making payments that are underpaid.