Date posted: 25th Mar 2024
As we have mentioned in previous updates, we are anticipating that significantly more companies will be required to pay quarterly instalments of tax, due to the re-introduction of the associated companies tests from 1 April 2023.
A recap of the rules is available here.
It may be the case that a company with a year-end of 31 March 2024, can pay the tax for that year on 1 January 2025, but if the company is deemed to be associated with another company, then the tax due for the year to 31 March 2025, may need to be paid in quarterly instalments on:
- 14 October 2024
- 14 January 2025
- 14 April 2025
- 14 July 2025
The first instalment for 2025, in this case, is before the tax due for 2024.
Businesses that may be required to pay quarterly instalments, will have to consider the cashflow impact of tax being paid early. If quarterly instalments are not paid then there may be interest imposed by HMRC and potential penalties where the payment is deliberately avoided.
The rules are complicated and will catch out many companies. As ever, our tax professionals are here to help, contact us here.
