COM95020 - Payments: quarterly instalment payments: calculating instalment amount due

The amount of tax to be paid at each instalment date is found by applying the formula

3 multiplied by CTI divided by n

Where

• CTI is the amount of the company’s total liability (net of all reliefs and set-offs) for the AP that is due to be paid in instalments. After the transitional period this is 100% of the liability. For more information see subject ‘Instalment Due Dates’ in this section
• n is the number of months in the AP, with part months calculated by reference to the number of spare days, divided by 30 and expressed as a decimal to two decimal places, rounded arithmetically

When the AP is 12 months, the application of the formula will result in a quarter of the liability being due at each instalment date. For APs of less than 12 months, the amount payable on each instalment date is the smaller of the

• Amount resulting from the application of the formula

And

• Amount of CTI that has not been allocated to any earlier instalments

See the Company Taxation Manual (CTM) at CTM92610 and 92620 for examples of how to calculate CTI and n.

When the Quarterly Instalment Payer signal (Word 31KB) is set to Y the calculation is done automatically by the computer.