Advanced Taxation (UK) · Corporation tax: taxable total profits

Quarterly Instalment Payments for Large Companies in Corporation Tax

Updated 11 October 2026 · Fact-checked

A large company pays its corporation tax in four quarterly instalments, not nine months after the period ends. You test augmented profits against the £1,500,000 threshold in the tax tables, check the very large test, then split the liability into four equal amounts and date each from the start of the period.

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 do not get that delay. They must pay in instalments, and the first one can fall before the period has even ended.

The test is based on profits. A company is large if its profits for the period exceed £1,500,000, which is the figure in the ACCA tax tables. It is very large if its profits exceed £20 million. The £1,500,000 is the figure confirmed in the tax tables extract used for this page. The £20 million figure, the £10 million first-year exemption limit and the due-date patterns below are not confirmed by that extract, so check them against the legislation before you rely on them. For this test, profits means augmented profits: taxable total profits plus exempt distributions received from companies that are not 51% subsidiaries or 51% parents.

Both thresholds are divided by one plus the number of associated companies. They are also time-apportioned for an accounting period shorter than 12 months. A company with two associates therefore has a large threshold of £1,500,000 ÷ 3 = £500,000. The lower and upper limits for the small profits rate and marginal relief (£50,000 and £250,000 in the tables) are adjusted in the same way.

The due dates differ. A large company pays on the 14th day of months 7, 10, 13 and 16 from the start of a 12-month period. A very large company pays on the 14th day of months 3, 6, 9 and 12 from the start of the period. Each instalment is 25% of the expected liability for a 12-month period.

There is a first-year exemption. A company that was not large in the previous period does not pay by instalments if its profits are £10 million or less, again divided by one plus the number of associates. This exemption does not apply to a company that is very large. Interest runs on late or underpaid instalments at the underpaid rate in the tables, which is 8.50%.

Key rules to remember

Large company threshold: Augmented profits > £1,500,000 ÷ (1 + number of associated companies); The £1,500,000 is given in the ACCA tax tables. Time-apportion it for a short period.
Very large company threshold: Augmented profits > £20,000,000 ÷ (1 + number of associated companies); This figure is not confirmed by the tables extract used for this page. Check it against the legislation. Time-apportion it for a short period.
Augmented profits: Augmented profits = Taxable total profits + exempt distributions from non-group companies; Use this figure for the threshold test only. Tax is charged on taxable total profits.
Instalment amount: Each instalment = 25% × estimated corporation tax liability for a 12-month period; Four equal instalments.
Large company due dates (12-month period): 14th day of months 7, 10, 13 and 16 from the start of the period; The first falls 6 months and 13 days after the start. The last falls 3 months and 14 days after the end. Confirm the pattern against the legislation.
Very large company due dates (12-month period): 14th day of months 3, 6, 9 and 12 from the start of the period; All four fall within the accounting period. Confirm the pattern against the legislation.
First-year exemption: Not large in the prior period and augmented profits ≤ £10,000,000 ÷ (1 + associates); Not available if the company is very large. The £10,000,000 figure is not confirmed by the tables extract, so check it against the legislation.

How to solve Quarterly Instalment Payments for Large Companies questions

Use the same sequence for any question on instalments. Work out the tax first, then test the thresholds, then date the payments.

1Compute taxable total profits and the corporation tax liability using the rates in the tables: small profits rate 19%, main rate 25%, lower limit £50,000 and upper limit £250,000, with marginal relief between the limits. Divide the lower and upper limits by one plus the number of associated companies, and time-apportion them if the period is shorter than 12 months. Use the main rate if profits exceed the adjusted upper limit.
2Work out augmented profits by adding exempt distributions from non-group companies to taxable total profits.
3Count associated companies and divide the thresholds by one plus that number. Time-apportion them if the period is shorter than 12 months.
4Compare augmented profits with the large and very large thresholds. Decide whether the company pays by instalments at all.
5If profits are within the large band, check the first-year exemption. The company was not large last year and has profits of £10 million or less, divided for associates.
6Divide the liability by four for a 12-month period and state each amount.
7Set the due dates from the start of the accounting period, using the large or very large pattern. Give the actual calendar dates.
8State any consequence of late payment. Interest runs at the underpaid rate of 8.50% from the due date.

Quickest way: Three-check shortcut for instalment questions

When to use it: Use this when the requirement is short, such as 'state when the company must pay and how much'.

Check 1: compare augmented profits with £1,500,000 and £20 million, after dividing for associates.
Check 2: if the company has just crossed the large threshold, test the first-year exemption.
Check 3: write the liability ÷ 4, then take the start date and add months: 7, 10, 13, 16 for large, or 3, 6, 9, 12 for very large.
Put the 14th day against each month and write the dates out.

Common mistakes in Quarterly Instalment Payments for Large Companies

Testing the threshold against taxable total profits only.
Students forget that the test uses augmented profits, so exempt distributions are missed.
Fix: Add exempt non-group distributions to taxable total profits before comparing with the thresholds.
Ignoring associated companies.
The £1,500,000 figure looks fixed in the tables.
Fix: Count the associates in the scenario and divide by one plus that number. Do this every time.
Dating the instalments from the end of the period.
Students mix the large pattern with the nine-month-and-one-day payment date that applies to other companies.
Fix: Count from the start of the period. Large companies pay in months 7, 10, 13 and 16. Very large companies pay in months 3, 6, 9 and 12.
Using the large company dates for a very large company.
The two patterns are learned together and confused.
Fix: Check the £20 million test first. If the company is very large, all four payments fall within the period.
Applying the first-year exemption to a very large company.
Students remember the £10 million exemption but not its exclusion.
Fix: The exemption is for companies that are large but not very large. A company with profits over £20 million does not qualify.
Forgetting to time-apportion for a short period.
The thresholds look like annual figures only.
Fix: Multiply each threshold by the number of months ÷ 12 before comparing.

Worked examples

Example 1

Alpha Ltd has no associated companies. For the 12 months to 31 March 2026 its taxable total profits are £2,000,000 and it has no exempt distributions. It was a large company in the previous period. Compute the instalments and give the due dates.

Show the solution

Corporation tax = £2,000,000 × 25% = £500,000. Alpha has no associates and the period is 12 months, so the limits are not reduced and the upper limit stays at £250,000. Profits are above it, so the main rate applies.
Augmented profits are £2,000,000. This is above £1,500,000 and below £20 million, so Alpha Ltd is large but not very large.
It was large in the previous period, so the first-year exemption does not apply. That exemption only helps a company that was not large in the prior period. The instalments are therefore due.
Each instalment = £500,000 ÷ 4 = £125,000.
The period starts on 1 April 2025. The large pattern is the 14th day of months 7, 10, 13 and 16.
Dates: 14 October 2025, 14 January 2026, 14 April 2026 and 14 July 2026.

Answer: Four instalments of £125,000, due on 14 October 2025, 14 January 2026, 14 April 2026 and 14 July 2026.

Example 2

Beta Ltd has no associated companies. For the 12 months to 31 December 2025 its taxable total profits are £21,000,000. It also received exempt distributions of £1,000,000 from an unrelated company. Determine its status, the instalment amount and the due dates.

Show the solution

Augmented profits = £21,000,000 + £1,000,000 = £22,000,000.
This is above £20 million, so Beta Ltd is very large.
Corporation tax = £21,000,000 × 25% = £5,250,000. Tax is charged on taxable total profits, not augmented profits.
Each instalment = £5,250,000 ÷ 4 = £1,312,500.
The period starts on 1 January 2025. The very large pattern is the 14th day of months 3, 6, 9 and 12.
Dates: 14 March 2025, 14 June 2025, 14 September 2025 and 14 December 2025.

Answer: Beta Ltd is very large. It pays four instalments of £1,312,500 on 14 March, 14 June, 14 September and 14 December 2025.

Exam tips

Show the threshold test as a short working with the associates divisor. The marks are usually for the method and the conclusion.
Write the actual calendar dates, not just 'month 7'.
Underline the number of associates in the scenario. It changes the answer.
If the question asks about cash flow, point out that instalments bring payment forward, and mention interest at the underpaid rate of 8.50% for late payment.
Quote the £1,500,000 from the tax tables. Confirm the £20 million and £10 million figures and the due-date patterns against the legislation and any figures given in the question.

Practice questions from Corporation tax: taxable total profits

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 threshold for quarterly instalment payments?

A company pays by instalments if its augmented profits exceed £1,500,000 for a 12-month period. The threshold is divided by one plus the number of associated companies, and reduced for a short period.

What is a very large company for instalment purposes?

It is a company with augmented profits above £20 million, again divided for associates and time-apportioned. It pays in months 3, 6, 9 and 12 of the accounting period, so all four payments fall before the period ends.

When are the instalments due for a large company?

For a 12-month period they are due on the 14th day of months 7, 10, 13 and 16 from the start of the period. The first is 6 months and 13 days after the start. The last is 3 months and 14 days after the end.

Does a company that has just become large pay by instalments?

Not necessarily. If it was not large in the previous period and its augmented profits are £10 million or less (divided for associates), it pays on the normal due date. This exemption does not apply to a very large company.