BIM60905 - Corporation tax: Quarterly Instalment Payments (QIP鈥橲)
A non-UK resident company dealing in or developing UK land 听will come within the charge to corporation tax on making a disposal of UK land or property on or after 5 July 2016.
Generally 鈥榣arge鈥� companies must pay their Corporation Tax electronically by quarterly instalments. A large company is one whose profits for the accounting period in question are at an annual rate of more than 拢1.5 million.
An exception to the requirement to pay by instalments for 鈥榣arge鈥� companies exists where the profits for an accounting period do not exceed 拢10m and at any time during the previous 12 months the company was outside the charge to UK corporation tax.
It follows that when a non-UK resident company does not have annualised profits over 拢10m when it first comes within the charge to UK corporation tax it will not initially be required to pay corporation tax by instalments.
Guidance on paying corporation tax in instalments can be found听here
Example 1:
Company A is non-UK resident and comes within the charge to corporation tax on making a dispoal on 1 August 2016. 听The company prepares its accounts to the 31 December 2016. Company A鈥檚 first UK accounting period therefore runs from 1st August to 31 December 2016 and profits for that period are 拢3m. Annualised profits are therefore just over 拢7M, so do not exceed 拢10M. Company A is a 鈥榣arge鈥� company for instalment purposes but it did not have an accounting period for corporation tax purposes prior to 1st August 2016 and its profits for the accounting period do not exceed 拢10m. Company A will not be required to pay by instalments for its accounting period ending 31 December 2016.
Example 2:
Company B is non-UK resident and comes within the charge to corporation tax on the 1st August 2016. The company prepares its accounts to the 31st December 2016 and its annualised profit is 拢25m. As Company B鈥檚 profits for its first accounting period for corporation tax purposes (1st August 2016 鈥� 31 December 2016) exceed 拢10m the exception to not pay by instalments does not apply. Company B鈥檚 first payment will be due 6 months and 13 days after the first day of its accounting period.