Corporation Tax (Instalment Payments) (Amendment) Regulations take effect

Published on 10 January 2019

For accounting periods beginning on or after 1 April 2019, the new Corporation Tax (Instalment Payments) (Amendment) Regulations (the Regulations) will take effect and introduce a new corporation tax payment regime for "very large companies".

Why does it matter?

The Regulations split large companies as defined under the current regime into “large” and “very large” companies, each with different requirements for the payment of corporation tax.

Large companies

  • Have taxable profits in an accounting period of more than £1.5m but less than £20m.
  • Payments due at months 7 and 10 of the accounting period the liability relates to and months 1 and 4 of the following accounting period.

Very large companies

  • Have taxable profits exceeding £20m in any accounting period.
  • Within a 12-month accounting period, payments will be due on the 14th day of months 3, 6, 9 and 12 of the accounting period the liability relates to.

In summary, payments for corporation tax are due four months earlier for very large companies.

The profits threshold and payment due dates for large and very large companies are adjusted proportionately for accounting periods of less than 12 months or companies which are a 51% owned subsidiary of the other or both are 51% subsidiaries of a third company.

What action should you take?

  • If your company’s taxable profit exceeds £20m in an accounting period, review the Regulations and technical guidance to ensure that any amendments required to remain compliant are put in force in good time

  • Read the payment date examples set out in the technical guidance and make a note of the corporation tax payment due dates

  • Ensure your payments are made on time to avoid any potential penalties.
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