Corporation Tax: Group Payment Arrangements

Group Payment Arrangements let groups of companies save money by making joint payments of Corporation Tax.


Group Payment Arrangements can reduce the administration associated with making a large number of individual payments. It might also reduce the overall interest charges that the group needs to pay.

Only certain groups will qualify for Group Payment Arrangements, and to make one, you need to complete a legal agreement. Your payments must also meet certain conditions.

Who a Group Payment Arrangement applies to

Companies that can enter a Group Payment Arrangement are a parent company and its 51% subsidiaries (any companies of which it is the beneficial owner of more than 50% of the ordinary share capital). The 51% subsidiaries of those subsidiaries, and so on, can also be included in the group.

This definition of a group for the purposes of Group Payment Arrangements is not necessarily the same as that used by HM Revenue and Customs (HMRC) in relation to other aspects of Corporation Tax or to other tax areas, or by other government departments and agencies.

How it works

A Group Payment Arrangement is an optional contract that you may be able to enter into with HMRC, if your company is a member of a group that meets the necessary conditions.

You don’t need to include all possible eligible companies in a Group Payment Arrangement, and you can have more than one arrangement to cover different sets of companies within the group. However, any one company can only be included within one Group Payment Arrangement for an accounting period.

How long it lasts for

When you set up a Group Payment Arrangement with HMRC it remains in place until you tell HMRC you no longer want it or, if there have been payment problems, HMRC decides not to continue it.

Who makes the payment

The companies in the arrangement nominate one of the members to make the payments on behalf of all the companies within the arrangement. This is known as the ‘nominated company’.

Although the nominated company is responsible for making the payments, the liability for Corporation Tax - how much is due, and when - is still the responsibility of the individual companies covered by the arrangement.


If you wish to apply for a Group Payment Arrangement, the following conditions apply:

  • the companies must be up to date with their filing and payment obligations
  • the nominated company must be resident in the UK but this requirement doesn’t apply to the other companies in the group - UK subsidiaries of overseas companies and UK branches of non-resident companies can be included in an arrangement, and companies qualify even though their 51% connection to the rest of the group is through an overseas parent
  • the 51% subsidiary relationship between members of the group must exist at the time the Group Payment Arrangement document is signed - if it later turns out that this wasn’t the case for any of the participating companies, those companies will be removed from the arrangement
  • the participating companies have to make up accounts to the same date as the nominated company
  • only companies that are active (for example trading) for Corporation Tax purposes should be included in a Group Payment Arrangement

You must tell HMRC if:

  • a company leaves the group (for example it’s been sold) - if you don’t, then the company will have to stay in the Group Payment Arrangement until HMRC finds out and removes it, which could leave you responsible for its tax liability even though it has left the group
  • a company leaves a group but money has already been paid into the arrangement on its behalf, you must tell HMRC at once to allow them to allocate payments correctly

Read more about which companies can participate in a Group Payment Arrangement in the Company Taxation Manual.


Simplified administration

With a Group Payment Arrangement, you only need to make one payment of Corporation Tax to HMRC, no matter how many companies are in the group. But you must make this payment using the special payment reference provided by HMRC, not the reference normally used by the individual companies.

Reduced interest charges

As some or all members of the group will normally have to pay Corporation Tax by instalments, at least 4 payments will be needed for each accounting period, starting mid-way through the accounting period. So your payments will have to be based on estimates of profits. It follows that the payments you make are unlikely to be exactly right and a ‘top-up’ payment or an overall repayment may be needed. There may also be interest due to or payable by HMRC.

A Group Payment Arrangement allows a group to retrospectively allocate the payments it has made against the tax liabilities of its members. The group can do this after all the member companies’ tax liabilities are known. This means the group can allocate its payments in a way that benefits it most. Because the interest rate that HMRC charges on an underpayment is higher than the interest they pay on an overpayment, this can result in a net saving of interest for the group.

Once the actual figures for the accounting period are known, HMRC will calculate whether the payments allocated to each company give rise to interest payments to or from HMRC.

How to apply

To apply for a Group Payment Arrangement, you must first make sure that all the conditions specified in the section in this guide on the conditions for Group Payment Arrangements are met, or will be met, by the appropriate dates.

You need to complete a Group Payment Arrangement document which is a written legal contract between you and HMRC. The document needs to be signed by a director of the company nominated to make the payments on behalf of the group. You must send it to HMRC at least one month before the first payment is due for the accounting period to be covered by the Group Payment Arrangement. That is 6 months and 13 days after the start of the Corporation Tax accounting period.

Send your completed Group Payment Arrangement document to the Group Payment Arrangement Team.

When completing your agreement, you should not fill in the date on page 1. This will be completed by HMRC.

You can read more about the Group Payment Arrangement document and how to complete it in the Company Taxation Manual.

Make payments

Payments made under a Group Payment Arrangement must be paid:

  • electronically
  • using the separate payment reference that HMRC will issue specifically for the Group Payment Arrangement

When you apply for a Group Payment Arrangement, you must tell HMRC which payment method you’ll use. You can use Bacs Direct Credit, CHAPS or Bank Giro.

You can read more about how to pay Corporation Tax and Group Payment Arrangements.

Repayments of overpaid Corporation Tax

If a repayment is due under the Group Payment Arrangement, HMRC will make it by electronic transfer to your bank account. Any time a repayment is due the nominated company should write to HMRC on company headed notepaper and tell them:

  • why you think a repayment is due
  • the bank account name, bank account number and sort code you want the repayment paid into
  • which of the group’s payments HMRC should use to make the repayment

Estimating what to pay

Each payment under a Group Payment Arrangement is a single payment to HMRC on behalf of the whole group. You don’t make individual payments for each member, nor do you provide a breakdown to HMRC to explain what the contribution is from each member. You don’t have to tell HMRC how the payments are to be apportioned between the members until after all the tax liabilities for the members of the arrangement have been established.

Reporting a change in contact details

If the person HMRC contacts for the group or their telephone number changes, you must tell HMRC. You can do this by calling the Group Payment Arrangement Team. If the address for a Group Payment Arrangement changes you must tell the Group Payment Arrangement Team in writing.

End of a period covered by a Group Payment Arrangement

A Group Payment Arrangement closes for an accounting period at whichever is the later of:

  • the date when all companies covered by the arrangement have either filed their Company Tax Returns or had their Corporation Tax payable ‘determined’ by HMRC
  • the last filing deadline date for the Company Tax Returns

Notice of closure

After the Group Payment Arrangement closes for a period, HMRC will issue a ‘Notice of closure’ (form CT630) to the nominated company, showing the payments made and the Corporation Tax due for each participating company at the date of closure.

The CT630 notice will ask the nominated company to pay any outstanding tax due, or state how it wishes to dispose of any net overpayment. It will also state, within 30 days, how the payments are to be apportioned between the participating companies. If you don’t do this, then HMRC will send you an Apportionment Notice (form CT631) showing you how they intend to allocate the payments for you, based on the actual figures due for each company in accordance with the Company Tax Returns and/or determinations. The notice will also show whether any interest is payable by HMRC, or due to be paid to them.

How to complete your form CT630

If you need any help completing your form CT630, please contact the Group Payment Arrangement Team.

You can read more about what happens at the end of a Group Payment Arrangement in the Company Taxation Manual.

Updates to this page

Published 1 January 2007

Sign up for emails or print this page