Instalment Payments of Corporation Tax

The UK tax system continues to grow increasingly complex and confused with self-assessment bringing only more pressure to bear. If a company's profits for an accounting period are at an annual rate of more than 1.5 million, you must normally pay your Corporation Tax for that period in instalments.

Exceptions to paying by instalments

If your profits go over the limit but were below it in the previous 12 months, then you don't have to pay in instalments, as long as your company's profits for the accounting period do not exceed an annual rate of 10 million. (The figure of 10 million is an annual rate - that is, the threshold is proportionately reduced for accounting periods of less than 12 months.)

Also you don't have to pay in instalments if any of the following are true:

  • There was any part of the previous 12 months when your company wasn't liable for or 'within the charge to' Corporation Tax.
  • For a Corporation Tax accounting period that ended during the previous 12 months the annualised profits didn't exceed 1.5 million and the annualised tax liability didn't exceed 10,000.
  • Your company's total Corporation Tax liability for the accounting period is less than 10,000. (The limit was 5,000 for accounting periods that ended before 1 July 2000.)

We offer a range of solutions tailored to the tax needs of small business and companies. Contact us online using our online tax enquiry form or alternatively call us today. We aim to ensure that our clients submit correct tax returns on time, avoiding penalties. Advance notice of rules and deadlines is our watchword and notification of liabilities, payment dates and amounts naturally follows. Additionally, we handle all Inland Revenue enquiries negotiating with the Revenue where necessary.