Yes, but it depends on why you are asking. For large companies with profits over £1.5 million, instalment payments are not optional: they are the required method of payment, enforced by legislation. For smaller companies that simply cannot pay the full bill by the due date, a different route exists: a Time to Pay arrangement negotiated with HMRC. The two situations have very different rules.
Quarterly Instalment Payments for large companies
Companies whose taxable profits exceed £1.5 million, divided equally between all associated companies, must pay Corporation Tax in four quarterly instalments rather than as a single payment. This regime is mandatory, not voluntary.
The £1.5 million threshold is reduced proportionally for accounting periods shorter than 12 months and divided by the number of associated companies. A company with two associated companies has a QIP threshold of £750,000 per company.
| 1st instalment: 14 October 2025 | 25% of estimated liability |
| 2nd instalment: 14 January 2026 | 25% of estimated liability |
| 3rd instalment: 14 April 2026 | 25% of estimated liability |
| 4th instalment: 14 July 2026 | Balance to actual liability |
Instalments 1 and 2 fall during the accounting period, before the profit is known.
Each instalment is based on the company's best estimate of the full-year liability at that point. The estimate is revised upward or downward with each subsequent payment. If the first three instalments collectively underpay the liability, the fourth instalment makes up the balance. If they overpay, HMRC repays the excess with interest.
Interest on underpaid or overpaid instalments
HMRC charges interest if each instalment is less than it should have been based on the eventual actual liability. The rate for underpayment within the QIP regime is lower than the standard late payment rate, currently the Bank of England base rate plus 1% (approximately 5.75%). Overpaid instalments attract repayment interest at the base rate minus 1%.
⚠️ New QIP companies: A company entering the large company regime for the first time (having had profits below £1.5m in the prior year) has a one-year grace period. In the first year it meets the threshold, it can still pay by the standard 9-months-and-1-day deadline. From the second year onwards, QIPs are mandatory.
Time to Pay arrangements for companies that cannot pay
For smaller companies that simply do not have the cash to pay the CT bill by the standard deadline, a Time to Pay (TTP) arrangement allows the liability to be spread across monthly instalments, with interest charged throughout, but no additional penalties provided the arrangement is in place before the payment deadline passes.
How to request a Time to Pay arrangement
You must contact HMRC's Payment Support Service before the payment deadline. You cannot apply online for CT Time to Pay, it requires a phone call to HMRC's Business Payment Support Service. HMRC will ask:
- The amount owed and the due date
- Why the company cannot pay in full by the due date
- What the company's monthly cash flow looks like
- How much the company can pay now and how much per month going forward
- Whether the company has explored other options (borrowing, asset sales)
HMRC will typically agree arrangements of up to 12 months for companies with a good compliance history and a credible repayment plan. Longer arrangements are possible but require stronger justification.
⚠️ Call before the deadline, not after: A TTP arrangement requested before the payment deadline can prevent the debt from becoming formally overdue. If you miss the deadline and then call, HMRC may still agree a TTP, but the debt is already late and interest is running from the day after the deadline. Calling early gives HMRC a more positive impression of the company's good faith.
What happens during a TTP arrangement
Once a TTP is agreed:
- HMRC will not pursue enforcement action (debt collection, County Court judgements) while the arrangement is being honoured
- Interest continues to accrue on the outstanding balance at the standard late payment rate (currently 7.25%)
- If the company misses a payment under the arrangement, HMRC can cancel it and the full balance becomes immediately due
- The company must continue to file CT600 returns on time throughout the arrangement period
What is not available
There is no HMRC scheme that allows a company to spread CT payment by electing to do so in advance, unless it is in the large company QIP regime. For small and medium-sized companies, paying in instalments is only possible through a TTP arrangement triggered by an inability to pay, not as a standard payment method.
✓ The better solution: The most effective way to avoid needing a TTP is to set aside CT as it accrues throughout the year. A simple approach: move the estimated CT portion of each month's profit into a separate savings account. When the payment date arrives, the money is already there.
💡 Rooby tip: Rooby shows your CT liability building in real time from your Xero data, so you can see the payment date and the amount accruing each month, making it straightforward to set aside the right amount throughout the year.
Rooby tracks your Corporation Tax liability and payment deadline in real time, so you can plan cash flow well in advance.