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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.
Log in to IRIS Business Tax and select the client.
From the Administration menu select Client Account.
The Account Details (Full Amounts) screen displays.
Click Insert.
The Insert new posting entry screen displays.
Click the magnifying glass next to the Type field and select the IOA1.1st instalment on account due option.
Select the relevant year end. In this example select 31/12/12 and click OK.
The instalment due date will display automatically in the next screen and will allow manual entry of the CT amount.
Log in to IRIS Business Tax and select the client.
From the Administration menu select Client Account.
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.
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
Click on the Quarterly Instalment Payments option.
In the following screen click the Ring Fence Tax Calculation tab.
