From 1 April 2019, ‘very large’ companies will be subject to accelerated quarterly payments, for accounting periods beginning on or after this date.
A ‘very large’ company is defined as having taxable profits in excess of £20 million. As with the current quarterly instalment rules for ‘large’ companies (i.e. with taxable profits in excess of £1.5 million) this figure is adjusted pro rata if the company has a shorter or longer accounting period than 12 months.
Similarly for groups, the threshold is also divided by the company and number of its associated companies. For example, a company with four associated companies would be subject to accelerated payments if its taxable profits exceeded £4 million.
Unlike the rules for large companies, there is no ‘first year of grace’ for companies falling within the ‘very large’ threshold.
If the company’s tax liability for the period is less than £10,000, it will not be required to make instalment payments, regardless of whether it is large or very large, and will be subject to the normal payment deadline of nine months and one day after the end of the accounting period.
Timetable for quarterly payments
| Event |
Large companies due date |
Very large companies due date |
| First quarterly payment date |
6 months and 13 days |
2 months and 13 days |
| Second quarterly payment date |
9 months and 13 days |
5 months and 13 days |
| Third quarterly payment date |
1 months and 13 days |
8 months and 13 days |
| Fourth quarterley payment date |
15 months and 13 days |
11 months and 13 days |
The above dates run from the start of the accounting period, so under the rules for very large companies, all payments will be made before the end of the year. This could lead to an additional tax payment being required post year-end and interest exposure for the company on underpaid tax. It will also impact the cash flow of the company, particularly on transition to the new payment dates.