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Corporation Tax: Overpayments

Question for Treasury

UIN HL1985, tabled on 13 July 2021

To ask Her Majesty's Government what steps they are taking to ensure that businesses are aware if they have overpaid corporation tax.

Answered on

21 July 2021

The UK corporation tax regime is a self-assessment regime. This means that the taxpayer is responsible for calculating their own taxable profits or allowable losses. Companies will submit their returns to HMRC confirming this and will, therefore, make payments of corporation tax or request repayments (where applicable) on this basis.

HMRC do not know that an amount is overpaid until the self-assessment for the period is filed. Repayments are issued automatically at this point, provided there are no other liabilities, open enquiries etc. In all other cases, repayments are treated as a priority and issued as soon as possible.

Similarly, if a company is due a refund for earlier years due to a loss in a later year, HMRC cannot know about this loss until a valid claim is made. To support businesses adversely affected by the COVID-19 pandemic, the Chancellor announced a temporary extension to the loss relief rules enabling companies to make claims to carry back up to £2 million of losses by two further years than pre-exisiting rules permit. HMRC have introduced a form on Gov.UK specifically to make it easier for companies to make such claims and has recruited additional staff to prioritise these and other repayment claims.

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