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ACCA Strategic Professional · Advanced Taxation (UK) · Tax advantages and disadvantages of alternative courses of action

Omega Ltd has taxable total profits of £120,000 for a 12-month period in financial year 2025, with no associated companies. It received no dividends from non-group companies. Which statement about the quarterly instalment regime for Omega Ltd is correct?

Omega Ltd is not required to pay by quarterly instalments because its profits of £120,000 do not exceed the £1,500,000 threshold. Its corporation tax is therefore paid in a single amount nine months and one day after the end of the accounting period.

  1. AIt must pay by quarterly instalments, because profits exceed £50,000
  2. BIt is not a large company, because its profits do not exceed the £1,500,000 profit threshold, so it pays nine months and one day after the period endCorrect
  3. CIt must pay by instalments, because it is above the small profits rate limit
  4. DIt may choose instalments or a single payment, as both are allowed below £250,000

Explanation

Quarterly instalments are required only where profits exceed the £1,500,000 threshold (divided by one plus the number of associated companies, with none here). Omega's £120,000 is far below it, so tax is due nine months and one day after the end of the period. The £50,000 and £250,000 limits relate to the rates, not the payment dates.

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