Taxation (UK) · The comprehensive computation of corporation tax liability

Quarterly Instalment Payments for Large Companies in TX-UK

Updated 11 October 2026 · Fact-checked

A company with augmented profits above £1,500,000 (divided by one plus its associated companies) pays corporation tax in four instalments, each 25% of the estimated liability for a 12-month period. A large company pays in months 7, 10, 13 and 16 after the period starts. A very large company (above £20,000,000) pays in months 3, 6, 9 and 12. All instalments fall on the 14th day.

Understand Quarterly Instalment Payments for Large Companies

Most companies pay corporation tax nine months and one day after the end of the accounting period. Large companies cannot wait that long. They pay in instalments, based on their own estimate of the tax, before the period ends or soon after it.

The test uses augmented profits. These are taxable total profits plus exempt distributions received, such as dividends from companies that are not 51% subsidiaries. The test is not on tax payable. A company is large if its augmented profits exceed £1,500,000. It is very large if they exceed £20,000,000. The £1,500,000 figure is in the tax tables ACCA gives you. The £20,000,000 figure is not, so learn it.

Both limits are divided by the number of associated companies plus one. They are also time-apportioned for an accounting period shorter than 12 months. A company with one associate has limits of £750,000 and £10,000,000.

The instalments are all due on the 14th day of a month. For a 12-month period, a large company pays in months 7, 10, 13 and 16 from the start of the period. A very large company pays in months 3, 6, 9 and 12. So a very large company pays all four instalments within the period itself, while a large company pays the last two after it has ended.

Each instalment is 25% of the expected total corporation tax liability for the period. You work out the whole liability first, then divide by four. Any difference between the estimate and the real figure is settled later.

There are two exceptions. No instalments are due if the liability is £10,000 or less. A company that was not large in the previous 12-month period, and whose augmented profits are £10,000,000 or less (divided by associates plus one), also pays on the normal due date. This second exception does not help a very large company.

Key rules to remember

Large company test: Augmented profits > £1,500,000 ÷ (number of associated companies + 1); Augmented profits = taxable total profits + exempt distributions received (not from 51% subsidiaries). Time-apportion the limit for a short period.
Very large company test: Augmented profits > £20,000,000 ÷ (number of associated companies + 1); This limit is not in the tax tables, so memorise it. It is also time-apportioned for a short period.
Amount of each instalment: Corporation tax liability for the period ÷ 4; Applies to a 12-month period. Do the corporation tax calculation, including any marginal relief, first.
Due dates: large company (12-month period): 14th day of months 7, 10, 13 and 16 after the start of the period; Equivalent to 6 months 13 days, then every 3 months. The last instalment is 3 months 14 days after the period ends.
Due dates: very large company (12-month period): 14th day of months 3, 6, 9 and 12 after the start of the period; Equivalent to 2 months 13 days after the start, then every 3 months.
Exceptions: Liability ≤ £10,000, or not large in the previous period and augmented profits ≤ £10,000,000 (÷ associates + 1); Pay on the normal due date, 9 months and 1 day after the period end. The second exception is for large, not very large, companies.
Normal due date: 9 months and 1 day after the end of the accounting period; Used for companies that are not large, or that meet an exception.

How to solve Quarterly Instalment Payments for Large Companies questions

Use this order for any question on instalments. The classification decides everything that follows.

1Work out taxable total profits, then add exempt distributions received (not from 51% subsidiaries) to get augmented profits.
2Count associated companies. Divide £1,500,000 and £20,000,000 by the number of associates plus one. Time-apportion both if the period is under 12 months.
3Compare augmented profits with both limits. Decide whether the company is not large, large or very large.
4If it is large, check whether the exceptions apply: liability of £10,000 or less, or not large last period with augmented profits of £10,000,000 or less (adjusted for associates). If so, the normal due date applies.
5Compute the corporation tax liability for the period. Use the main rate or the small profits rate, with marginal relief if it applies. Divide the liability by four.
6Write down the due dates. Count from the start of the period: months 7, 10, 13, 16 for a large company, or months 3, 6, 9, 12 for a very large company. Use the 14th day.
7Set the answer out as a short table of date and amount, and state the classification you used.

Quickest way: Classify, divide by four, count from the start

When to use it: Use for a 12-month period when the question asks for instalment dates and amounts. Check the period length first.

Compute augmented profits and compare with £1,500,000 and £20,000,000, each divided by associates plus one.
Take the corporation tax liability and divide by four.
Write the period start date. A large company pays on the 14th of months 7, 10, 13 and 16. A very large company pays on the 14th of months 3, 6, 9 and 12.
Cross-check the last date. A large company's last instalment is 3 months 14 days after the period end. A very large company's last falls on the 14th of the last month of the period.

Common mistakes in Quarterly Instalment Payments for Large Companies

Testing taxable total profits instead of augmented profits.
Students forget that dividends from non-group companies are added back for these limits.
Fix: Always write out the augmented profits line first, adding exempt distributions received. Leave out dividends from 51% subsidiaries.
Ignoring associated companies when applying the limits.
The associate count is easy to miss in a long scenario.
Fix: Underline any mention of associated or group companies. Divide both limits by the number of associates plus one before comparing.
Counting due dates from the end of the period, or using 9 months and 1 day for a large company.
The normal due date is the best-known rule, so students apply it by habit.
Fix: Count from the start of the period. Use the 14th of months 7, 10, 13 and 16 for large, and months 3, 6, 9 and 12 for very large.
Mixing up the large and very large patterns.
Both use four instalments on the 14th, so the schedules look alike.
Fix: Remember that a very large company pays earlier: its first instalment falls in month 3. A large company's first falls in month 7.
Applying the first-year exception to a very large company.
Students remember a £10,000,000 exception without noting who can use it.
Fix: The exception covers a company that is large but not very large, and was not large in the previous period. A very large company always pays by instalments.
Calculating each instalment on profits rather than on tax.
The question gives profit figures, and students split them by four.
Fix: Compute the full corporation tax liability first, including marginal relief where relevant. Then divide the tax by four.

Worked examples

Example 1

Roth Ltd has no associated companies. For the 12 months ended 31 December 2025 its taxable total profits are £2,000,000, with no dividend income. It was also large in the previous period. State whether it pays by instalments, and give the due dates and amounts.

Show the solution

Augmented profits are £2,000,000, as there is no dividend income.
The large company limit is £1,500,000 (no associates). £2,000,000 exceeds this, so the company is large.
The very large limit is £20,000,000. The company is below it, so it is large but not very large.
The company was large in the previous period, so the exception does not apply. Instalments are due.
Corporation tax is £2,000,000 × 25% = £500,000. Profits are above the £250,000 upper limit, so there is no marginal relief.
Each instalment is £500,000 ÷ 4 = £125,000.
The period starts on 1 January 2025. A large company pays on the 14th of months 7, 10, 13 and 16: 14 July 2025, 14 October 2025, 14 January 2026 and 14 April 2026.

Answer: Roth Ltd is a large company. It pays four instalments of £125,000, due on 14 July 2025, 14 October 2025, 14 January 2026 and 14 April 2026.

Example 2

Vale Ltd has one associated company. For the 12 months ended 31 March 2026 its taxable total profits are £9,000,000. It also received dividends of £2,000,000 from unconnected UK companies. Classify the company and give the instalment dates and amounts.

Show the solution

Augmented profits are £9,000,000 + £2,000,000 = £11,000,000.
There is one associate, so divide the limits by 2. The large limit is £750,000 and the very large limit is £10,000,000.
£11,000,000 exceeds £10,000,000, so the company is very large. The £10,000,000 exception does not help a very large company.
The profits are far above the upper limit (£250,000 ÷ 2 = £125,000), so the main rate of 25% applies with no marginal relief.
Corporation tax is £9,000,000 × 25% = £2,250,000. Dividends from unconnected companies are exempt and are not in taxable total profits.
Each instalment is £2,250,000 ÷ 4 = £562,500.
The period starts on 1 April 2025. A very large company pays on the 14th of months 3, 6, 9 and 12: 14 June 2025, 14 September 2025, 14 December 2025 and 14 March 2026.

Answer: Vale Ltd is a very large company. It pays four instalments of £562,500, due on 14 June 2025, 14 September 2025, 14 December 2025 and 14 March 2026.

Exam tips

Write the classification test as your first lines. Method marks usually follow from showing augmented profits and the adjusted limits.
In objective test questions, a wrong date or amount scores zero. Check the period start date and count the months twice.
Look for associated companies and dividends from non-group companies. These details are often placed in the scenario to change the classification.
Show the calculation of the full tax liability before dividing by four. In written answers, state the main rate and any marginal relief.
If the period is shorter than 12 months, time-apportion the limits. Read the question carefully before assuming 12 months.

Practice questions from The comprehensive computation of corporation tax liability

Quarterly Instalment Payments for Large Companies in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Quarterly Instalment Payments for Large Companies: frequently asked questions

What is the difference between a large and a very large company for corporation tax?

A large company has augmented profits above £1,500,000, adjusted for associates. A very large company has augmented profits above £20,000,000, adjusted in the same way. Both pay by instalments, but a very large company pays earlier, from month 3 of the period.

When is corporation tax due for a company that pays in instalments?

Each instalment is due on the 14th day of a month counted from the start of the period. For a 12-month period, a large company pays in months 7, 10, 13 and 16. A very large company pays in months 3, 6, 9 and 12.

Why is corporation tax normally paid 9 months and 1 day after the period end?

That is the standard due date for companies that are not required to pay by instalments. Large and very large companies replace it with the instalment dates. A large company can still use the normal date if it meets an exception, such as a liability of £10,000 or less.

How much is each quarterly instalment?

For a 12-month period, each instalment is 25% of the company's expected corporation tax liability. Work out the full liability first, including any marginal relief, and then divide by four.