Corporation tax: paying in instalments

The corporation tax rate for small companies, currently stands at 19%. This rate is expected to stay the same until 31 March 2019, at this date the rate will change to 18%.
The corporation tax payment date for small companies is 9 months and 1 day after the accounting year end, this is consistent with previous years.
For large companies however, which are defined as companies with profits of more than 1.5m, they are required to make corporation tax instalments to HMRC.
 
If your company has a 12 month accounting period, you are required to pay in 4 equal instalments, which fall due on the following dates:
  • 6 months and 14 days after the first day of the accounting period 
  • 3 months after the first instalment 
  • 3 months after the second instalment 
  • 3 months and 14 days after the last day of the accounting period
 
EXAMPLE
If your accounting period runs from 01 January 2017 to 31 December 2017 then your payment dates will be as follows:

First payment 

14 July 2017

Second payment

14 October 2017

Third payment 

14 January 2018

Final payment 

14 April 2018

It is important to note that as an individual company even if your profit does not exceed 1.5m, if your company is part of a group and the groups profit exceed 1.5m collectively, corporation tax instalments will need to be made.
  • Your corporation tax instalments are calculated based on your expected corporation tax liability. Management accounts figures should help to provide a reliable estimate of your company's total liability. This estimated liability then needs to be paid equally over 4 payments with the final payment being the remainder of the tax owed.
 
If your payments are miscalculated and you underpay your corporation tax then you will be liable to interest on that underpayment you may also be subject to penalties.
If any assistance is required with corporation tax matters or any general dealings with HM Revenue & Customs, please contact you nearest Perrys office.
 
Article written by Leanne Ormsby