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ACCA Strategic Professional · Advanced Taxation (UK) · Corporation tax: the comprehensive calculation of the corporation tax liability, including overseas aspects

Zeta Ltd, a UK resident trading company with a 12-month accounting period and no associated companies, has taxable total profits of £1,200,000 for the year ended 31 March 2026. Which statement about the payment of its corporation tax is correct, using the profit threshold for quarterly instalments in the ATX-UK tax tables?

Zeta Ltd pays in a single amount nine months and one day after the period end. Its profits of £1,200,000 are below the £1,500,000 quarterly instalment threshold, so it is not a large company. The £250,000 upper limit relates to marginal relief, not payment dates.

  1. AZeta Ltd must pay by quarterly instalments because its profits exceed £250,000
  2. BZeta Ltd is not a large company for instalment purposes because its profits do not exceed £1,500,000, so it pays in one amount nine months and one day after the period endCorrect
  3. CZeta Ltd must pay by quarterly instalments because its profits exceed £1,000,000
  4. DZeta Ltd pays in one amount twelve months after the end of the accounting period

Explanation

The quarterly instalment profit threshold is £1,500,000 for a company with no associated companies. Profits of £1,200,000 are below this, so the company is not large and pays the whole liability nine months and one day after the end of the period. The £250,000 figure is only the upper limit for marginal relief and is irrelevant to instalments.

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