REFUND OR INTEREST ON CORPORATION TAX

ASESA Solutions Ltd- REFUND OR INTEREST ON CORPORATION TAX

If your company or organisation has paid more Corporation Tax than required, HM Revenue & Customs (HMRC) will refund the overpaid amount and may also pay interest on the excess payment. This ensures businesses are not disadvantaged where funds have been paid to HMRC earlier or in excess of the final liability.

HMRC currently pays interest on Corporation Tax overpayments at a rate of 2.75%.

Refunds -

Companies must use their Company Tax Return to notify HMRC if they believe a Corporation Tax refund (also known as a repayment) is due and to specify how the refund should be made. Providing bank details on every return can significantly speed up the repayment process.

Before issuing a refund, HMRC will offset any outstanding liabilities. This may include:

• Other taxes owed by the company, such as PAYE or VAT

• A future Corporation Tax bill or late filing penalties

  
  

Any remaining balance will then be refunded either to the original payment card, via Bacs transfer, or as a payable order sent to the company’s registered address. Repayment details can be viewed through the business tax account. Companies may also be able to reduce liabilities further by claiming eligible Corporation Tax allowances or reliefs.

When HMRC Will Pay Interest-

HMRC may pay interest if the company has:

• Paid Corporation Tax early (Credit Interest)

• Paid more than the final amount owed (Repayment Interest)

  
  

All interest received from HMRC is taxable income and must be included in the Company Tax Return.

Credit Interest — Paying Tax Early

Credit interest applies where a company pays Corporation Tax before the statutory payment deadline, often due to advance or instalment payments based on estimated profits. HMRC generally calculates interest from the date the payment is made up to the Corporation Tax due date, subject to minimum timing rules. The earliest HMRC will usually pay credit interest is 6 months and 13 days after the start of the accounting period. Credit interest is applied automatically once the final tax position is confirmed.