What is a quarterly instalment payment for corporation tax?

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## What is a Quarterly Instalment Payment (QIP) for Corporation Tax?

### What the law says

Quarterly Instalment Payments (QIPs) are governed by the **Corporation Tax (Instalment Payments) Regulations 1998 (SI 1998/3175)**, made under the authority of s.59DA(8) and s.59E of the Taxes Management Act (TMA) 1970.

The obligation to make instalment payments applies only to **large and very large companies**, as defined in Regulation 3 of SI 1998/3175:

- A company is **large** if its profits for the accounting period (AP) exceed **£1.5 million**.
- A company is **very large** if its profits for the AP exceed **£20 million**.

"Profits" for these purposes means **chargeable profits plus non-group exempt distributions of a qualifying kind** (i.e. augmented profits). The upper limit is reduced proportionately when the AP is less than 12 months, and is also reduced when the company has associated companies.

The **due and payable dates** for instalments are set out in **Regulation 5** of SI 1998/3175. For a standard 12-month AP, a large company pays in **four equal quarterly instalments** as follows:

| Instalment | Due Date |
|---|---|
| 1st | 6 months and 13 days from the start of the AP |
| 2nd | 3 months from the 1st instalment due date |
| 3rd | 3 months from the 2nd instalment due date |
| 4th | 3 months and 14 days from the end of the AP |

For **very large companies** with accounting periods beginning on or after **1 April 2019**, instalments are due in **months 3, 6, 9 and 12** of their AP.

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### HMRC guidance / practice

QIPs apply only to **large/very large companies** within the **Corporation Tax Self Assessment (CTSA)** regime, and only to tax required to be self-assessed — i.e. CT chargeable on the company's profits, tax under s.455 CTA 2010 (close company loans to participators), and tax under s.747 ICTA 1988 (controlled foreign companies).

The key practical features of QIPs are:

1. **Estimate-based payments**: Because the exact liability cannot be known until the return is filed, companies make instalments based on their **best estimate** of the amount due. In most cases, the only consequence of getting payments wrong or making them late will be an **interest charge**.

2. **Interest regime**: Debit interest is charged under s.87A TMA 1970 (as extended by Regulation 7 of SI 1998/3175) on QIPs made **late or in insufficient amounts**. Credit interest is paid under s.826 ICTA 1988 (as extended by Regulation 8) on **early or excessive** instalment payments.

3. **Instead of a single payment**: Large and very large companies pay their liability in instalments rather than in one lump sum nine months and one day after the end of the AP (which is the normal due date for non-QIP companies).

4. **Group Payment Arrangements**: Many QIP cases have their tax paid through a Group Payment Arrangement, where a nominated company pays the CT liabilities of all companies covered by the arrangement on the quarterly instalment due dates.

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Instalment	Due Date
1st	6 months and 13 days from the start of the AP
2nd	3 months from the 1st instalment due date
3rd	3 months from the 2nd instalment due date
4th	3 months and 14 days from the end of the AP