A company prepares its accounts for the year ended 31 March each year and is a large
Question:
A company prepares its accounts for the year ended 31 March each year and is a ‘large’ company for corporation tax instalments purposes. During the year ended 31 March 2020 it paid tax of £5,600,000. It bases the year ended 31 March 2021 instalment payments on this amount and pays the instalments due on time. In early August 2021 it finalised its corporation tax calculation for the year ended 31 March 2021 at £6,400,000 and settled any remaining corporation tax liability on 14 August 2021.
Required
Calculate the following:
i. The instalments originally calculated as due for the year ended 31 March 2021 and the due dates for payment.
ii. The revised instalments for the year following August 2021 finalisation.
iii. The position with interest payments and the amount due (assume an interest on overdue tax rate on underpaid instalments of 1.1% - calculate on a monthly basis).
The instalments that the company will initially pay for the year ended 31 March 2022 and the due dates for payment.