COM95080 - Payments: quarterly instalment payments: pursuit
Source: gov.uk (2025-10-10)


Companies must decide for themselves if they need to make instalment payments.

Pursuit begins from the final instalment due date if the liability is known. The date from which pursuit begins depends on the Accounting period (AP) end date. It is only for pursuit purposes that the due date differs for QIP companies, for all other purposes such as charging of credit interest, debit interest, late payment interest or penalties, the normal due date applies.

No recovery or enforcement action is to be taken before the relevant pursuit due date and the posting of the tax charge, even if instalment payments seem to be due because the ‘quarterly instalment payer’ (QIP) signal is set to ‘P’ or ‘L’ or 'V'.

If recovery or enforcement action commences before the normal due date but the ‘QIP’ signal is changed from 'L' or 'V' to 'N' the following happens:
- the payment application sequence stops and automatically recommences after the normal due date or, where the ‘QIP’ signal is unset more than seven days before the normal due date
- LA or LA-ENF status is cancelled
- any ‘CII’ and / or ‘CDII’ signal remains set but if the record was also LA or LA-ENF, this status is cancelled and the record automatically made RFI
- where PLA is set, any LA or LA-ENF status is not affected
The guidance at COM110000 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com110000) should be followed for subsequent recovery and enforcement procedures.

A company must show in its return if it considers that it was liable to make instalment payments. Depending on the entry on the return processed onto COTAX, the ‘QIP’ signal is set to ‘L’ or 'V' on the AP to show it is liable to make instalment payments, or ‘N’. Once the return has been processed onto COTAX, you must not manually set the signal to ‘P’.

COTAX automatically sets the 'N' signal on the next AP. If the captured signal is 'Y', COTAX sets the value in the next AP to 'P'. When an AP is superseded, the value of the ‘QIP’ signal is carried forward to the linked superseding AP.

If the company indicates on the return that it was a QIP payer for the AP, COTAX computes credit and debit interest on the basis that it is liable to pay by instalments.

If the company did not indicate on the return that it was a QIP payer for the AP, COTAX computes credit interest on the basis that it is not liable to pay by instalments.

Whatever the entry on the return, if the AP is linked to an open group payment period for a Group Payment Arrangement, credit and debit interest is not calculated and posted until the group payment period is cleared. For more information see COM96000 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com96000) onwards.

COTAX automatically checks whether the details on the return correspond with the QIP entry on the return. Where there is an apparent discrepancy, the case is entered on the Quarterly Payer Review List (QPRW). You should regularly review this work list because there may be apparent discrepancies as listed below:
- if a company does not indicate that it was an instalment payer for the AP and the profits exceed the upper limit, COTAX enters the case on QPRW so you can review the apparent discrepancy. If the company falls within the Regulation 3(3) ‘companies becoming large exemption’, you should delete the entry from the work list. If it does not, set the signal to ‘L’ or 'V' and review the interest position
- if the company has indicated that it is an instalment payer but the profits are below the upper limit, the company may be a QIP case because there are 51 per cent companies that reduce the level of the upper limit, but they are not shown on the return. You should check if there have been any payments made that suggest the company is a QIP case
- a caseworker may be able to review the file or accounts to establish the existence of any 51 per cent or group companies. Do not contact the company or agent to ask any questions that could be construed as opening an enquiry. If you establish that the company is a QIP case, you should set the ‘QIP’ signal to ‘L’ or 'V' and review the interest position. You should also tell the company and any agent that you have done this and why. If you do not, the company may be charged debit interest without being told why, which may generate unnecessary correspondence
If you cannot establish that the company is a QIP case, the company may have completed the entry on the return by mistake. However, the company or agent believe company to be a QIP and may have information not available or apparent from Return alone. Do not change the signal to N where the company shows itself as being a QIP (COTAX signal will already be set as "L" or "V"). The QIP signal for the following AP should be set to ‘P’”.

There are cases where a company does not complete the QIP entry on the return, the profits are below the upper limit but the company is a QIP case because of the number of 51 per cent companies. COTAX does not enter these cases on QPRW because it cannot identify any apparent discrepancy. You may only discover such cases if the company has actually made quarterly payments and the company or agent notifies you of an unexpected repayment of credit interest.

If a company is overpaid, does not complete the QIP entry on the return and the profits are less than the upper limit, COTAX enters the case on the LOPD work list if:
- the repayment reallocation inhibit signal, automatic or manual, has previously been set
- the following AP ‘QIP’ signal was set to ‘L’ or 'V'or ‘P’
COTAX cannot automatically reallocate payments to a company's AP if that AP is linked to an open group payment period for a Group Payment Arrangement. For more information see COM96000 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com96000) onwards.

If an overpayment arises because a payment is received of a payment type other than Bacs or CHAPS which takes the total amount paid above the total amount due for the AP and no other inhibitions exist, COTAX automatically enters the case on the ORUR Work List and inhibits repayment for 14 days.

Because of possible errors, a caseworker should review the ‘QIP’ signal as part of any risk assessment of the return. COTAX’s automatic action is based only on the company's declaration of its position.

Where the ‘QIP’ signal is set to ‘L’ or 'V' or ‘P’ for an AP, payslips are issued a month before each instalment date for the AP. This is a customer service that does not affect the principle that the Regulations require the company to act without prior prompting. See COM96000 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com96000) onwards if the company is a participating company in a Group Payment Arrangement.

A caseworker can manually set or change the ‘QIP’ signal for an AP using functions MAPS (Maintain AP Signals) or RAMA (Record/Amend Assessment).

The HMRC Payments and Debt Management may set the ‘QIP’ signal to ‘P’ or ‘N’ using function RAPP (Revise AP Pursuit) but cannot set or amend the signal to ‘L’ or 'V'. The value of the ‘QIP’ signal for an AP is displayed in functions RAPP (Revise AP Pursuit) and DAPD (Display AP Details).

If the ‘QIP’ signal is set to’ ‘P or ‘L’ or 'V' and the company requests time to pay, you should refer the case to DMB. You can find further guidance at DMBM800000 (http://home.active.hmrci/dmbmanual/DMBM800000.htm) in the Debt Management and Banking Manual.

The Regulations require QIP companies to pay their CT by instalments, on the instalment due dates, on their best estimate of the liability for the AP. A request to pay less than they consider due at an instalment date is not a request for time to pay.

On receipt of such a request, DMB explains that if the company chooses not to pay the estimated liability for one or more instalments:
- debit interest will arise on inadequate payments or payments made after the instalment due date but prior to the normal due date. For more information see COM80000 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com80000) onwards
- late payment interest will arise on payments made after the normal due date
- a caseworker may later consider that the company has incurred a penalty. There is nothing in the Regulations in mitigation for a company not paying the estimated instalment liability
See:
- the Enquiry Manual at EM8301 (https://www.gov.uk/hmrc-internal-manuals/enquiry-manual/em8301)and EM8330 (https://www.gov.uk/hmrc-internal-manuals/enquiry-manual/em8330)for more information
- COM95011 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com95011) for a list of functions to use in particular situations