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 (Word 49KB) for the AP for an AP ending on or after 1 October 1993
Or, for a Quarterly Instalment Payment (Word 42KB) (QIP) case
- Instalment due date (Word 42KB) for an AP ending on or after 1 July 1999
This obligation does not depend upon an assessment charge or a payment application.
To minimise the charge to interest, a company will need 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 the Inspector.
Conversely, 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 business area ‘Repayments and Reallocations’.
Once the normal due date is reached and the tax liability (self) assessed
- Credit interest (Word 34KB) is paid for any amounts received before the due date (CTSA APs only)
- Debit interest (Word 31KB) is charged for any instalment paid late (CTSA APs only)
- Late payment interest (Word 27KB) will be charged once the tax is paid in full
- Repayment interest (Word 80KB) will be paid for amounts overpaid or reallocated
The computer issues payment reminders 28 days before and 42 days after the normal due date 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
- A special condition (Word 30KB) prevents the reminder being issued
Note: For a CTSA AP the company tax return must include a self assessment of tax payable
Collection of all duty types is controlled by reference to APs. Where there are amounts collectible for more than one AP, the computer issues separate payment applications for each AP.
Collection by reference to APs is consistent with the way in which tax, interest and late filing penalties are charged. Although penalty determinations are made for specified periods (Word 27KB), 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 will be allocated to the collection record for the relevant APs.
For a list of forms relevant to this subject, see COM90011.
For a list of functions to use in particular situations, see COM90012.
For legislation applying to this subject, see COM90013.