HMRC have opened a new call for evidence about the timely payment of Corporation Tax by small companies, and Income Tax. It seeks views on the opportunities and challenges of introducing in-year calculation and payment of these taxes.

At a glance

In 2020 the government published a ten-year Tax Administration Strategy. One of its aims is to achieve a tax system that works closer to real-time through increased digitisation. The idea is that this will make it easier for taxpayers to manage their tax cashflow and thereby avoid tax debts arising, the so-called ‘tax gap’.

HMRC research shows that:

  • Many taxpayers would prefer a system that required them to pay smaller regular tax payments instead of the current system which requires fewer larger payments.
  • The current system causes difficulties for those entering Self Assessment for the first time such as the newly self-employed and new landlords.

The call for evidence seeks to explore the appropriate frequency and timing of tax payments, alongside planned changes to Income Tax (IT) and Corporation Tax (CT) reporting under Making Tax Digital (MTD). In particular, it looks at the tax payment regimes in other countries such as Australia and the USA where payments are made quarterly, and France which moved to a quarterly and monthly payment regime in 2019.

It also considers how tax payments should be calculated, especially for those taxpayers who will fall outside of MTD and whether the use of Flat rate expenses is appropriate.

It defines ‘Timely Payment’ as “bringing the calculation and payment of tax closer to the point where the income or profit arises, paying tax based on the taxpayer’s current year position using, where possible, up-to-date data”.

In scope taxes, which make up 34% of all outstanding debts to HMRC are:

  • Income Tax and National Insurance Contributions (NICs) outside of PAYE, currently paid twice yearly on account with balancing payments by 31 January after the end of the tax year.
  • Corporation Tax outside of the Quarterly payment regime, currently due nine months and one day after the end of the company accounting period.
  • Views are also welcomed on the more timely payment of:
    • Capital Gains Tax (CGT) for disposals outside of the current rules for paying CGT on residential property sales.
    • Other taxes administered by HMRC, except VAT which is already being looked at.

Responses to the call for evidence are invited by email to This email address is being protected from spambots. You need JavaScript enabled to view it.. The deadline is 13 July 2021.

Useful guides on this topic

Companies: Filing & payment deadlines
If you run a UK business via a UK-registered company you will have the following ongoing filing & payment deadlines.

MTD: Toolkit for accountants
What is the current timetable for Making Tax Digital? How will it work? Which clients will be excluded? What planning needs to be undertaken? 

CGT: Payment of tax
When is Capital Gains Tax (CGT) due? Can I pay in instalments? What are the penalties if I pay late? What are the new rules from April 2020?

Penalties: Late Payment
What penalties are charged when tax is paid late.

External links

Call for evidence: Timely payment 

HMRC & HM Treasury: Tax Administration Strategy report 

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