COM90010 - Payments: processing payments: the payment obligation
A company must calculate its liability to CT and pay the appropriate amount to HMRC by the normal due date for the Accounting Period (AP) or, for a quarterly instalment payment (QIP) case, the instalment due date. See COM90025 for more information.
This obligation does not depend upon an assessment charge or a payment application.
To minimise the charge to interest, a company needs to make further payments if it later discovers that its original estimate was too low. The increased liability may result from the company's own review of tax due or because of enquiries made by HMRC.
A company can make a claim to repayment if it later believes that the payment made was too high. A company can also claim provisional repayment of Income Tax and tax credits before its liability for an AP is finally settled. For more information see COM120000 onwards.
Once the normal due date is reached and the tax liability self assessed:
- credit interest is applied for any amounts received before the instalment due date
- debit interest is charged for any instalment of tax paid late
- late payment interest is charged once the tax is paid in full and after the normal due date for the return period
- repayment interest is paid for amounts overpaid or reallocated, if repaid or reallocated after the normal due date for the return period
Unless a special condition listed below:
- An assessment charge has been created - the computer automatically commences the payment application sequence in these circumstances
- A suspension has been recorded (for an AP without an assessment charge)
- The company’s addresses are RLS
- The Insolvency signal is set to ‘Y’
- The company has ceased trading
- The AP is Status is either Superseded, Exempt or Dormant
- The No Determination Required or No Assessment Required signal has been set to ‘Y’
Prevents the reminder being issued, COTAX issues first payment reminder 20 days before the normal payment due date, and if no payment or return is received within 28 days before the return filing due date, a second payment and return reminder is issued if:
- there are no amounts on function VPPD (View Payment and Posting Details) Screen D, with a posting type of ‘PYT’ or ‘RTO’
- the return has not been received
Collection of all duty types is controlled by reference to APs and is consistent with the way in which tax, interest and late filing penalties are charged. Although penalty determinations are made for specified periods, a penalty charge is always allocated to an AP. If the charge relates to failures for more than one AP, the appropriate parts of the charge are allocated to the record for the relevant APs.
See: