Quarterly instalment payments
Quarterly instalment payments are the corporation tax timetable for large companies. Once augmented profits exceed £1,500,000, tax is paid in four instalments during and shortly after the accounting period instead of nine months afterwards.
Also known as: QIPs
How it works
Most small companies pay corporation tax nine months and one day after the accounting period ends. A company whose augmented profits exceed £1,500,000 pays instead in four instalments, due in months 7, 10, 13 and 16 measured from the start of a twelve-month period. Very large companies, above £20m, pay even earlier, in months 3, 6, 9 and 12.
The threshold is divided by the number of associated companies, so a group can fall into instalments at much lower profits than the headline figure suggests. There is also a one-year grace: a company is not treated as large in a period if its profits are £10m or less and it was not large in the previous period.
Because instalments are due before the year's results are known, they are based on estimates that have to be revised as the year progresses. HMRC charges interest on underpaid instalments and pays credit interest on overpayments, with the position finalised once the CT600 is filed.
For a fast-growing company this is a cash flow event rather than a tax increase. The first year in instalments effectively brings forward part of a year's tax, and it needs forecasting well before the first date falls due.
Who this affects
- Companies whose profits are approaching £1,500,000
- Groups where the threshold is divided between associated companies
- Fast-growing businesses facing an overlap of old and new payment timetables
- Finance teams forecasting cash for the first instalment year
Common mistakes
- Missing that associated companies divide the threshold
- Basing instalments on last year's profit when this year's is far higher
- Overlooking the first-year grace rule and paying earlier than necessary
Frequently asked questions
When do quarterly instalment payments apply?
When augmented profits exceed £1,500,000, divided by the number of associated companies, and the first-year exemption does not apply.
When are the instalments due?
For a twelve-month period, in months 7, 10, 13 and 16 from the start of the period. Very large companies above £20m pay in months 3, 6, 9 and 12.
What happens if I underpay an instalment?
HMRC charges interest on the underpaid amount from the instalment date, and pays credit interest where instalments were overpaid.
Does the threshold change with associated companies?
Yes. £1,500,000 is divided by the number of associated companies plus one, so groups reach instalments sooner.
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Reviewed by Waqas Sagar ACA FCCA FMAAT · Last reviewed 13 September 2026 · Figures for 2026/27 · About our practice
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