Taxes Management Act 1970 section Schedule 3ZC paragraph 8

Effect of CT payment plan

Section Schedule 3ZC paragraph 8 sets out the legal consequences of entering into a CT payment plan, covering how the deferred tax remains due, and the rules on payment collection, interest, penalties and early payment.

• The deferred tax remains legally due under normal corporation tax rules, but HMRC can only collect it in accordance with the payment plan schedule
• Interest continues to accrue on the deferred tax as if no payment plan existed, and must be paid alongside each instalment
• Late payment penalties only apply if the company fails to meet the payment plan schedule, not by reference to the original due date
• The company may pay off any outstanding deferred tax early at any time, together with accrued interest up to the date of payment