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ACCA Strategic Professional · Advanced Taxation (UK) · Corporation tax: the scope of corporation tax, including close companies and investment companies

Delta Ltd has no associated companies and an accounting period to 31 December 2025 of 12 months. Its taxable total profits are £1,600,000. Which statement about payment of its corporation tax is correct?

Delta Ltd must pay by quarterly instalments. Its profits of £1,600,000 exceed the £1,500,000 threshold, which applies without associated companies in a 12-month period, so the normal nine-months-and-one-day payment date does not apply.

  1. AIt must pay by quarterly instalments because profits exceed £1,500,000Correct
  2. BIt pays in one amount nine months and one day after the period end
  3. CIt pays by quarterly instalments only if profits exceed £10,000,000
  4. DIt pays by quarterly instalments only if it is a large company with associates

Explanation

The quarterly instalment profit threshold is £1,500,000 for a company with no associated companies in a 12-month period. Profits of £1,600,000 exceed it, so instalments are required. Nine months and one day is the normal due date for companies below the threshold.

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