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HMRC internal manual

Company Taxation Manual

From
HM Revenue & Customs
Updated
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CTSA: quarterly instalments: large companies

A company is ‘large’ for the purposes of quarterly instalment payments if its profits for an accounting period exceed the CTA10/S24 amount of the upper limit in force at the end of the accounting period.

  • ‘Profits’ means profits chargeable to CT plus franked investment income received other than from a company in the same group,
  • You reduce the upper limit proportionately when the accounting period is less than twelve months,
  • You reduce the upper limit when the company has associated companies by dividing it by one plus the number of those companies,
  • ESC C9 applies when you consider the number of associated companies.

Note: a company is not large if its total liability does not exceed £10,000. (This limit is proportionately reduced if the accounting period is less than 12 months.)

See Example 1 for a case that is not ‘large’ because of the level of profits.

See Example 2 for a case that is not ‘large’ because its total liability does not exceed £10,000 although its profits are more than the upper limit.

Example 1

  • Company A has five associated companies. Its profits for the 12 month accounting period ended 30.11.2011 are £200,000 and the tax liability £56,000.
  • Company A is not a large company for this accounting period because its profits do not exceed the upper limit of £1,500,000 / 6 (1 + 5) = £250,000.

Example 2

  • Company B has five associated companies. Its profits for the 12-month accounting period to 31.12.2011 are £260,000 and the tax liability £9,500.
  • Company B is not a large company for this accounting period. Although its profits exceed the upper limit its tax liability does not exceed £10,000.