How to enter quarterly instalment payments for Corporation Tax

Introduction

Payments on account and contributions made towards them are recorded in the client account which is accessed via the Administration menu within IRIS Business Tax.

The client account is used to:

• Keep track of all payments a client makes to the HMRC

• Make comparisons to the HMRC financial statements

Under corporation tax self-assessment large companies are required to pay their corporation tax in four quarterly instalment payments. These payments are based on the company’s estimate of its current year tax liability.

If your company’s profits for an accounting period are at an annual rate of more than £1.5 million, you must pay your Corporation Tax for that accounting period in instalments, unless certain exceptions apply. See HMRC website for more details.

• The overwhelming majority of companies are not within the quarterly payment regime and pay their corporation tax nine months and one day after the end of their accounting period.

Example

A new client has been setup within Business Tax for the 12 months to 31/12/12 and has profits chargeable to corporation tax of £2,519,500 giving a liability of £617,208.66.

Entering Instalments on Account Due

Marking Instalments on Account Due as PAID

Estimating Quarterly Instalment Payments

Entering Instalments on Account Due

1. Log in to IRIS Business Tax and select the client.

2. From the Administration menu select Client Account. The Account Details (Full Amounts) screen displays:
   
   
   

3. Click Insert. The Insert new posting entry screen displays:
   
   
   

4. Click the magnifying glass in the Type field and select the IOA1.1^st instalment on account due option.

5. Select the relevant year end.

6. In this example select 31/12/12 and click OK.

7. The instalment due date will display automatically in the next screen and will allow manual entry of the CT amount.

8. Repeat these steps for the 2^nd instalment on account due, and so on.
   

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Marking Instalments on Account Due as PAID

1. Log in to IRIS Business Tax and select the client.

2. From the Administration menu select Client Account.

3. Click Instalment on account due entry, click Payment and enter the date that the client made the payment, then click OK.
   
   

• The Payment will show as PAID and will be matched to the Instalment on account date.

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Estimating Quarterly Instalment Payments

If users simply want to estimate the corporation tax liability and get an idea of the quarterly instalment due dates and amounts, users can use the Quarterly Instalment Payments option within this screen.

This screen enables users to enter in figures, which will automatically calculate the quarterly instalment payment amounts based on the tax rates above for each financial year.

Once the quarterly instalment payments have been calculated, users can click Update Client Account at the bottom of the screen.

This information will then feed into the client account screen shown below:

• Within the Quarterly Instalment Payments screen there is an option to enter any Ring Fence profits. This can be done by going to Administration |Client Account.

1. Click on the Quarterly Instalment Payments option.

2. In the following screen click the Ring Fence Tax Calculation tab.
   
   

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