Pay Corporation Tax if you're a very large company
Find out how to work out payments and when you should make them if your company’s annual taxable profits are over £20 million.
If your company’s profits for an accounting period beginning on or after 1 April 2019 are at an annual rate of more than £20 million, you must pay your Corporation Tax for that period by instalments.
Find out when to pay instalments if you have profits less than £20 million.
Very large companies
A very large company is one whose profits for the accounting period in question are at an annual rate of more than £20 million.
The threshold is reduced proportionately if the accounting period is less than 12 months and the company has one or more related 51% group companies, for accounting periods beginning on or after 1 April 2015 and beginning before 1 April 2023.
For accounting periods beginning on or after 1 April 2023, the threshold is proportionately reduced by the number of associated companies a company has including itself.
A company is associated with another company if:
- one is under the control of the other
- both are under the control of the same person or persons
Control is usually defined by reference to ownership of share capital or voting power.
A company may be an associated company no matter where it’s resident for tax purposes.
Example — associated companies
A company has 7 associated companies. Its profits for the 12 month accounting period ending 31 December 2024 are £3 million.
The annual adjusted threshold is: £20 million divided by 8 (that is 7 + the company itself) = £2,500,000.
Although the profits for the accounting period are less than £20 million, the profits are more than the adjusted annual threshold of £2.5 million and the company is very large for instalment payment purposes.
Exceptions
Your company does not need to pay by instalments for an accounting period even though the profits are more than the threshold of £20 million if the amount of its total liability for the accounting period is less than £10,000 (or when the accounting period is less than 12 months, less than the annual rate of £10,000).
Whereas, for the first accounting period in which a company’s profits are more than the £1.5 million profits threshold, it does not need to pay its liability in instalments, there is no such period of grace for when a company becomes very large.
A company will be very large even if it was not very large in the 12 months immediately before the accounting period.
When instalment payments need to be paid
The dates when you need to pay your Corporation Tax instalments and the number of payments depends on the length of your accounting period.
12 month accounting periods
If your company has a 12 month accounting period, you’ll need to pay in 4 equal instalments due:
- 2 months and 13 days after the first day of the accounting period
- 3 months after the first instalment
- 3 months after the second instalment
- 3 months after the third instalment
This will be the 14th day of months 3, 6, 9 and 12 of the accounting period.
Example — accounting period from 1 January 2025 to 31 December 2025
| Payment | Payment due date |
|---|---|
| First payment | 14 March 2025 |
| Second payment | 14 June 2025 |
| Third payment | 14 September 2025 |
| Final payment | 14 December 2025 |
Accounting periods shorter than 12 months
If your accounting period is shorter than 12 months, the rules apply to ensure that the final instalment payment falls within your accounting period.
Subject to exceptions, the last instalment date will depend on which day of the month the end of your accounting period falls — if your accounting period ends on:
- the last day of the month, the last instalment will be due 14 days after the end of the preceding month
- a day for which there is a corresponding date in the preceding month, the last instalment falls 14 days after that date in the preceding month
- a day for which there is no corresponding day in the previous month, the last instalment is due 14 days after the last day of the previous month
Exceptions
If the last instalment date falls before the beginning of your accounting period, a single payment is due on the last day of the accounting period.
The first instalment date is 2 months and 13 days after the start of the accounting period. There is an exception to this is if this date falls on or after the date of the final instalment. If this occurs, the total liability is paid on the final instalment date.
The second instalment date is 3 months after the first, unless this falls on or after the final instalment date in which case the total liability is paid on the first and final instalment dates.
The third instalment date is 3 months after the second, unless this falls on or after the final instalment date in which case the total liability is paid on the first, second and final instalment dates.
Example — accounting period from 1 January 2027 to 28 February 2027
The accounting period ends on the last day of the month.
| Payment | Payment due date |
|---|---|
| Final payment | 14 February 2027 (14 days after the end of the preceding month) |
There is no first instalment. This would have been 14 March 2027, that is 2 months and 13 days after the beginning of the accounting period. As this ends after the date of the final instalment, the whole liability is payable on the last instalment date.
Example — accounting period from 1 January 2030 to 30 March 2030
The accounting period ends on a date for which there is no corresponding day in the previous month.
| Payment | Payment due date |
|---|---|
| Final payment | 14 March 2030 |
There is no first instalment. This would have been 14 March 2030, that is 2 months and 13 days after the beginning of the accounting period. As this ends on the date of the final instalment, the whole liability is payable on the last instalment date.
Example — accounting period from 1 January 2030 to 14 January 2030
The last instalment is due before the accounting period start date.
| Payment | Payment due date |
|---|---|
| Final payment | 14 January 2030 |
The last instalment would have been 28 December 2029 (that is 14 days after the corresponding date in the previous month). As this falls before the beginning of the accounting period, the total liability is payable on the last day of the accounting period.
Example — accounting period from 1 January 2030 to 30 May 2030
The accounting period ends on a day for which there is a corresponding date in the previous month.
| Payment | Payment due date |
|---|---|
| First payment | 14 March 2030 |
| Final payment | 14 May 2030 |
There is no second instalment as this would have been 3 months after the first instalment (14 June 2030). As this is after the final instalment date, the liability is payable over 2 instalments.
Example — accounting period 1 January 2030 to 31 October 2030
The accounting period ends on the last day of the month.
| Payment | Payment due date |
|---|---|
| First payment | 14 March 2030 |
| Second payment | 14 June 2030 |
| Third payment | 14 September 2030 |
| Final payment | 14 October 2030 |
The final instalment is 14 days after the last day of the preceding month.
Work out instalment payments
Step 1: estimate your company’s total liability
To work out your instalment payments, first estimate your Corporation Tax liability for the accounting period.
This includes:
- tax charged in respect of controlled foreign companies
- bank Corporation Tax surcharge
This excludes:
- bank levy
- Corporation Tax or supplementary charge on ring fence profits and adjusted ring fence profits of oil and gas companies
Step 2: work out the amount of each instalment
If there is only one payment date, the whole of the liability referred to at step 1 is due on that date.
If there is more than one instalment date, the amount:
- due on the first instalment date is the lesser of the Corporation Tax liability and the amount given by the formula given in the next section
- due on the second and third instalment dates are the lesser of the Corporation Tax liability - B and the amounts given by the formula — B is the amount of the liability due to be paid on previous instalment dates
- payable on the final instalment date is the Corporation Tax liability - B
Formula
The formula is:
3 x (Corporation Tax liability/wm + wmd)
Where:
- ‘wm’ is the number of whole months falling within the accounting period
- wmd’ is the decimal (calculated to two places rounded arithmetically when necessary) of the fraction R/30, where ‘R’ is the number of days in an accounting period outside the whole months represented by ‘wm’
Example — accounting period 1 January 2028 to 31 July 2028 and Corporation Tax to pay of £3,100,000
| Calculation Step | Result |
|---|---|
| Company’s total liability | £3,100,000 |
| Months in the accounting period | 7 |
| Company’s total liability ÷ months in the accounting period x 3 | 3 x (£3,100,000 ÷ 7) = £1,328,571 |
| Smaller of company’s total liability and company’s total liability ÷ months in the accounting period x 3 | £1,328,571 |
| First and second payments | £1,328,571 |
| Third and final payment | £3,100,000 – (2 x £1,328,571) = £442,858 |
Bank levy
All companies that pay bank levy are large for the purposes of applying the instalment payment rules. For accounting periods beginning on or after 1 April 2019, if your company pays bank levy it will be very large if its profits for the accounting period are more than £20 million.
This threshold is reduced proportionately if the accounting period is less than 12 months and the company has one or more related 51% group companies for accounting periods beginning on or after 1 April 2015 and beginning before 1 April 2023.
For accounting periods beginning on or after 1 April 2023, the threshold is proportionately reduced by the number of associated companies.
If your company is very large, the bank levy payments will be the same as the large company dates.
All other liabilities including bank Corporation Tax surcharge will move to the dates for very large companies.
Bank levy is excluded from the total liability in applying the £10,000 test to determine if the company is very large.
Oil and gas ring fence companies
If your company is liable for Corporation Tax and supplementary charge on profits from ring fence activities, these liabilities will remain on the current instalment dates.
For accounting periods beginning on or after 1 April 2019 all other liabilities will move to the dates for very large companies.
Updates to this page
Published 4 December 2019Last updated 12 April 2023 + show all updates
-
Information for accounting periods ending on or after 1 April 2015 and before 1 April 2023 has been added. This change is due to legislative changes with effect from 1 April 2023.
-
First published.