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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Corporation Tax self-assessment (CTSA): the payment obligation: general

Tax liability

Companies must calculate their tax liability and pay this to the Revenue by the normal due date. This obligation arises automatically and does not depend on any action by the Revenue.

If the company is ‘large’, within the meaning of The Corporation Tax (Instalment Payments) Regulations 1998, it must pay its liability in instalments for CTSA accounting periods, see CTM92500 onwards.

The company will need to make further payments if it finds that its estimate has been too low. Also, it can claim a repayment if it later believes that the initial payment was too high, see CTM92090 - CTM92110.


Interest is chargeable on tax paid late under TMA70/S87A. It runs from the normal due date.

For CTSA accounting periods, companies that are required to make quarterly instalment payments of tax are liable to interest (‘debit interest’) on late and inadequate instalment payments, see CTM92650.

For CTSA accounting periods, companies that pay tax before the normal due date are entitled to interest (‘credit interest’) from the Revenue, see CTM92290.

A company that makes quarterly instalment payments is entitled to credit interest only if the total amount of tax paid at a point in time exceeds the amount it was due to pay at that time, see the example at CTM92680.

For both CTSA and CTPF accounting periods, repayments of tax attract repayment interest under ICTA88/S826. The interest runs:

  • on repayments of CT (including, for CTSA accounting periods, tax under ICTA88/S419 and ICTA88/S747) from the later of:
    • the normal due date,
    • and
    • the date on which the tax was paid.

However, see CTM98245 for the complications that arise with Section 419 tax:

  • on repayments of IT and payments of tax credit,
    • for a CTSA accounting period, from the day after the end of the accounting period,
    • for a CTPF accounting period, from the normal due date.

Group companies can, subject to certain rules, surrender overpayments between themselves with a view to avoiding or reducing the effect of the different rates of interest charged on underpayments and paid on overpayments, see CTM92440 onwards.