The next instalment

10 November 2009

Issue: 4231 / Categories: Forum & Feedback , Companies

A limited company has had increasing levels of profit over the past four-years. HMRC are claiming interest on the basis that corporation tax instalment payments should have been made previously

Our client company had profits chargeable to corporation tax in the years ended 30 September 2007 2008 and 2009 of £125 000 £1.6 million and over £10 million respectively. The profit for the year ending 30 September 2010 is estimated as being over £10 million.

HMRC have issued interest notices for the 30 September 2008 year saying that these are due as the company was ‘large’ i.e. over the £1.5 million profit threshold. We consider this to be incorrect and the auditors agree with us.

The auditors have advised us that in their view instalments should have begun for the 30 September 2009 year as the company’s profits were in excess of £10 million and over £1.5 million in the previous year. They therefore contend that instalments should have commenced on 13 April 2009.

Our reading of the

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