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HMRC internal manual

COTAX Manual

HM Revenue & Customs
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Payments: processing payments: the payment obligation

A company must calculate its liability to CT and pay the appropriate amount to HMRC by the normal due date (Word 49KB) for the AP or, for a quarterly instalment payment (QIP) case, the instalment due date (Word 42KB).

This obligation does not depend upon an assessment charge or a payment application.

To minimise the charge to interest, a company needs to make further payments if it later discovers that its original estimate was too low. The increased liability may result from the company’s own review of tax due or because of enquiries made by HMRC.

A company can make a claim to repayment if it later believes that the payment made was too high. A company can also claim provisional repayment of Income Tax and tax credits before its liability for an AP is finally settled. For more information see COM120000 onwards.

Once the normal due date is reached and the tax liability self assessed:

  • credit interest is paid for any amounts received before the due date
  • debit interest is charged for any instalment paid late
  • late payment interest is charged once the tax is paid in full
  • repayment interest is paid for amounts overpaid or reallocated.

Unless a special condition (Word 30KB) prevents the reminder being issued, COTAX issues payment reminders 12 days before and 28 days after the normal due date if:

  • there are no amounts on function VPPD (View Payment and Posting Details) Screen D, with a posting type of ‘PYT’ or ‘RTO’
  • the return has not been received.

Collection of all duty types is controlled by reference to APs and is consistent with the way in which tax, interest and late filing penalties are charged. Although penalty determinations are made for specified periods, a penalty charge is always allocated to an AP. If the charge relates to failures for more than one AP, the appropriate parts of the charge are allocated to the record for the relevant APs.


  • COM90011 for a list of forms relevant to this subject
  • COM90012 for a list of functions to use in particular situations
  • COM90013 for legislation applying to this subject.