New Corporation Tax Payment Dates

In the summer Budget 2015, the government announced that it will be introducing new corporation tax (CT) payment dates. These new dates will come into effect for accounting periods beginning or after 1 April 2019 and will accelerate the payment of corporation tax by 4 months. The companies that will be affected by these news dates are those with taxable profits in excess of £20million for the accounting period. But it is really important to appreciate that the threshold will be divided up when the company is a member of a group whose total profit exceed £20 million. For example, if there are 5 companies in a group, each has a threshold of £4million, but if there are 50 companies in the group then the threshold is only £400,000.

Under the new corporation tax payment dates, these companies are required to make payments in months 3, 6, 9 and 12 of their accounting period. During the first year of these changes, the first payment will be due before the final payment under the existing rules so companies need to ensure they are prepared for the impacts this may have on cashflow.

An example of how the new payment dates will affect a company whose year end is 31 August is as follows:

Payment datePeriod covered 
14/03/2019Q1 – y/e 31 August 2019Old rules
14/06/2019Q2 – y/e 31 August 2019Old rules
14/09/2019Q3 – y/e 31 August 2019Old rules
14/11/2019Q1 – y/e 31 August 2020New rules
14/12/2019Q4 – y/e 31 August 2019Old rules
14/02/2020Q2 – y/e 31 August 2020New rules
14/05/2020Q3 – y/e 31 August 2020New rules
14/08/2020Q4 – y/e 31 August 2020New rules

 

For companies with taxable profits of less than £20 million, payment dates will not change.

The full legislation can be found at: http://www.legislation.gov.uk/uksi/2017/1072/mad

For more information on large companies tax visit: https://www.hawsons.co.uk/large-companies-tax/

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Stephen Charles

Stephen Charles

Tax Partner, Sheffield

0114 266 7141

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