CTM92530 - CTSA: quarterly instalments: special cases
Source: gov.uk (2025-11-12)


SI1998/3175/REG3 (4) and (5) (see CTM92505 (https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm92505)) exempts certain companies from quarterly instalment payments.

Reg 3(4) SI1998/3175

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.

Example
- Company A has five 51% related group companies. Its profits for the 12 month accounting period to 31 December 2016 are £260,000 and the tax liability £9,500.
- Company A is not a large company for this accounting period. Although its profits exceed the profit threshold (£1.5m/6 = £250,000), its tax liability does not exceed £10,000.
Reg 3(5) SI1998/3175

A company does not have to make quarterly instalment payments if:
- both its profits for the accounting period do not exceed £10 million, and
- it was not large in the twelve months preceding the accounting period (except because of the operation of this exemption).
One effect of this is that growing companies are not quarterly instalment payment cases for the first accounting period in which they are 'large', unless the growth is very substantial.

'Profits' means the same as it does in CTM92520 (https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm92520). The £10 million limit is reduced:
- for accounting periods of less than twelve months proportionately, and
- for accounting periods beginning before 1 April 2015 and after 31 March 2023 by the number of associated companies including the reference company, or
- for accounting periods beginning on or after 1 April 2015 to 31 March 2023 by the number of related 51% group companies including the reference company.Associated companies/related 51% group companies for this purpose count:
- as at the day before the start of the accounting period, or
- on the first day of the accounting period if the previous day did not fall within an accounting period.A company is not ‘large’ in the twelve months preceding the accounting period if:
- there is any part of that twelve months in which it did not exist or did not have an accounting period, or
- an accounting period in which it was not a large company (except because of the operation of this exemption) falls or ends within that twelve-month period.
Example 1 is a company that is 'large' by reference to the profit threshold and the level of profits. Nevertheless, it does not need to make quarterly instalment payments if it was not large in the previous accounting period.

Example 2 covers three accounting periods of a company. In the first the company is not large by reference to the profit threshold. In the second it is not large because it was not large in the previous accounting period. In the third it is large and must make quarterly instalment payments.

Example 1
- Company C has five 51 per cent related group companies. Its profits for the 12 month accounting period ended 31 December 2016 are £260,000 and the tax liability £72,000.
- On these figures C is a large company for this accounting period. If it was not a large company during the previous 12 months it is not a large company for this period.
Example 2
- Company D, with nine associated companies, has the following profits for accounting periods of 12 months:
Accounting period ended

Profits

Liability

31 December 2008

£200,000

£56,000

31 December 2009

£140,000

£39,200

31 December 2010

£160,000

£44,800

31 December 2011

£170,000

£47,600

Company D is not large for either the 2009 or the 2010 accounting period because:
- for 2009 its profits do not exceed the profit threshold of £1,500,000 / 10 = £150,000.
- for 2010, although its profits do exceed that figure, it was not a large company during the previous 12 months.
Company D is large for the accounting period ended 31 December 2011 because:
- its profits exceed the profit threshold and in the previous 12 months it was only treated as not large under the REG3 (5) exemption.