What trigger events cause the entire outstanding balance of deferred corporation tax to become due under Schedule 3ZC paragraph 10?

Under paragraph 10 of Schedule 3ZC, trigger events include the company becoming insolvent, entering administration, having a liquidator appointed (including equivalent events outside the UK), failing to pay any deferred tax amount for 12 months after its due date, or ceasing to be within the charge to corporation tax.

When does the outstanding balance become due after a trigger event under a CT payment plan?

The outstanding balance does not become due immediately on the date of the trigger event itself. Instead, it becomes due on the date that the next instalment of deferred tax would otherwise have been payable under the CT payment plan, giving a short period before the accelerated amount must be paid.

Does a company entering administration outside the United Kingdom trigger acceleration of deferred corporation tax?

Yes. Equivalent insolvency or administration events occurring under the laws of a country or territory outside the United Kingdom also trigger acceleration. The full outstanding balance of deferred corporation tax under the CT payment plan becomes due on the next instalment date following the overseas event.

What happens if a company fails to pay deferred corporation tax for 12 months under a CT payment plan?

If a company fails to pay any amount of deferred corporation tax and that amount remains unpaid for 12 months after its due date, the entire remaining outstanding balance under the CT payment plan is accelerated. The full balance becomes payable on the date the next instalment would otherwise have been due.

Taxes Management Act 1970 Schedule 3ZC paragraph 10

The payment method: all of outstanding balance due

Paragraph 10 of Schedule 3ZC sets out the trigger events that cause the entire outstanding balance of deferred corporation tax under a CT payment plan to become due immediately.

If a company becomes insolvent, enters administration, or a liquidator is appointed, the full outstanding balance of deferred tax falls due on the next instalment date
Equivalent insolvency or administration events occurring outside the UK also trigger the outstanding balance becoming due
Failure to pay any amount of deferred tax for 12 months after its due date accelerates payment of the entire remaining balance
If the company ceases to be within the charge to corporation tax, the outstanding balance becomes due on the next instalment date

Access full legislation.And much more.

By becoming a member, your team gets full access to Tax World research tools and source-backed tax resources.

Become a member