This paragraph applies where the demand notice is issued on or before 31st December in the relevant year, but has effect subject to paragraph 3 below.

The aggregate amount is to be payable in monthly instalments.

The months in which the instalments are payable must be uninterrupted, but subject to that are to be such months in the relevant year as are specified in the notice; and the instalments are to be payable on such day in each month as is so specified.

If the aggregate amount divided by the number of instalments gives an amount which is a multiple of a pound, the instalments shall be of that amount.

If the aggregate amount so divided would not give such an amount, all but the first instalment shall be of an amount equal to A and the first instalment shall be of an amount equal to B, where

$\mathrm{A}=\genfrac{}{}{0.1ex}{}{\mathrm{C}}{\mathrm{D}\text{,}}$

• rounded up or down (as the case may be) to the nearest pound,

• B = C − (D − 1) × A),

• C is equal to the aggregate amount, and

• D is equal to the number of instalments to be paid.

If the calculation of instalments in accordance with sub-paragraph (6) would produce an amount for an instalment of less than £5, the demand notice may require that the amount which, but for this sub-paragraph, would be the second instalment shall be added to the amount which, but for this sub-paragraph, would be the first instalment, and the number of instalments shall be reduced by one.