Have you overpaid Corporation Tax?
UHY Hacker Young have identified that UK Businesses overpaid at least £9.1billion in Corporation Tax in the year to 31st March 2020. This was an increase of 12.4% over the previous year, and is likely to be much higher this year, as the impact of Coronavirus reduces profits.
Many larger businesses have to make payments of Corporation Tax on estimated profits, similar to the Self Assessment process. If their profits have reduced significantly, which is likely given recent events, they may well have overpaid Corporation Tax.
With PAYE there is a process for overpayments to be automatically refunded to businesses, but there is no equivalent for Corporation Tax. Businesses will therefore need to make sure that they take account of any overpayment, and offset any losses that may arise this year against the amounts already paid, or apply for a refund of the overpaid amounts.
If this applies to you, our advice is to get your Corporation Tax Return submitted as soon as possible.
Whilst you can apply for a refund of overpaid Corporation Tax before submitting the Return, it tends to be a lengthy procedure and getting your Return in is far easier!
As an aside, as mentioned before, Companies House has automatically extended the filing deadline for accounts by three months, but the filing deadline for the Corporation Tax Return AND the due date for any tax that may be due, remains unchanged.
The added bonus to getting your Return submitted promptly, particularly in this situation, could be a healthy tax refund which is likely to be welcome at the moment.
As ever, if you’re concerned that this may affect you, please get in touch.
We’ll be taking careful note of how this may affect our clients, so if we act for you, you’ll be absolutely fine!