Key facts
- Quarterly Instalment Payments (QIPs) apply when augmented profits exceed £1.5 million (divided by associated companies).
- Large companies pay in months 7, 10, 13, and 16 from the start of the accounting period.
- Very large companies (profits over £20 million) pay earlier — months 3, 6, 9, and 12.
- Each instalment is 3/CT (three-twelfths) of the estimated annual CT liability.
- Interest is charged on underpaid instalments and credited on overpaid ones.
Who Must Pay by Instalments?
A company must pay Corporation Tax in quarterly instalments if its augmented profits for the accounting period exceed £1.5 million.[1]
Augmented profits means taxable total profits plus exempt distributions received (franked investment income from non-group companies).
The £1.5 million threshold is divided equally by the number of associated companies the company has at the end of the previous accounting period. For example:[3]
- 1 company (no associates): threshold is £1,500,000
- 3 associated companies: threshold is £500,000 each
- 10 associated companies: threshold is £150,000 each
Dormant companies are excluded from the count of associated companies when calculating the instalment threshold. Only active, associated companies are counted.[3]
Large Companies — Standard QIP Dates
A “large” company (profits above £1.5 million but not exceeding £20 million, after dividing by associated companies) pays in four equal instalments. For a standard 12-month accounting period, the instalments fall on the 14th day of:[1]
| Instalment | Due Date (from period start) | Example: year ending 31 March 2026 |
|---|---|---|
| 1st | 14th of month 7 | 14 October 2025 |
| 2nd | 14th of month 10 | 14 January 2026 |
| 3rd | 14th of month 13 | 14 April 2026 |
| 4th | 14th of month 16 | 14 July 2026 |
Each instalment should be one quarter (25%) of the company’s estimated Corporation Tax liability for the full period. Companies must estimate their liability in advance and adjust later instalments if the estimate changes.
Very Large Companies — Accelerated Dates
A “very large” company (augmented profits exceeding £20 million, divided by associated companies) must pay instalments earlier. The four instalments fall on the 14th day of:[1]
| Instalment | Due Date (from period start) | Example: year ending 31 March 2026 |
|---|---|---|
| 1st | 14th of month 3 | 14 June 2025 |
| 2nd | 14th of month 6 | 14 September 2025 |
| 3rd | 14th of month 9 | 14 December 2025 |
| 4th | 14th of month 12 | 14 March 2026 |
This means very large companies must pay their entire CT liability before the accounting period has even ended.
Tip: The very-large-company regime was introduced from 1 April 2019. If your profits fluctuate around the £20 million threshold, check which regime applies for each period — the rules are based on profits in the current period, not the previous one.
Estimating Your Liability
Because instalments are paid during the accounting period, companies must estimate their total Corporation Tax liability. HMRC expects the estimate to be made on a “just and reasonable” basis.[1]
- Base early estimates on budgets, forecasts, and prior-year results
- Revise the estimate as actual results become clearer during the year
- Adjust later instalments upwards or downwards to match the revised total
- After filing the CT600, any underpayment or overpayment is settled with HMRC
Interest on Instalments
HMRC charges interest on underpaid instalments and pays (a lower rate of) interest on overpaid ones. Interest runs from each individual instalment due date, not just the final payment deadline.[4]
This means that deliberately underpaying early instalments to retain cash will attract interest — the saving in cash flow may be offset by the cost of interest. Interest positions are finalised when you file the company’s CT600 online and HMRC reconciles the instalments against the actual liability.
First-year exemption: A company entering the QIP regime for the first time (i.e. it was not “large” in the previous period) does not need to pay by instalments unless its profits exceed £10 million. This gives newly-large companies a one-year buffer.[1]
Frequently Asked Questions
Which companies must pay Corporation Tax in quarterly instalments?
Companies with augmented profits exceeding £1.5 million (divided by the number of associated companies) must pay in quarterly instalments. The threshold drops if you have associated companies.
When are quarterly instalment payments due?
For large companies, instalments fall on the 14th of months 7, 10, 13, and 16 from the start of the accounting period. Very large companies (profits over £20 million) pay earlier — months 3, 6, 9, and 12.
What is the first-year exemption for quarterly instalments?
A company entering the QIP regime for the first time does not need to pay by instalments unless its profits exceed £10 million. This gives newly-large companies a one-year buffer.
Is interest charged on underpaid quarterly instalments?
Yes. HMRC charges interest on underpaid instalments from each individual instalment due date, not just the final payment deadline. A lower rate of interest is paid on overpaid instalments.
Further Reading
- Payment Deadlines — the standard 9-months-and-1-day rule
- Associated Companies — how associated companies divide the thresholds
- Interest & Penalties — late payment interest rates and filing penalties
- Paying Corporation Tax — payment methods and HMRC bank details
- Corporation Tax Rates — current rates and thresholds
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