Corporate tax overpayments: Do businesses have any leftovers?

As if clients haven’t enough on their plates – the pandemic’s impact upon corporate profits may mean supporting them with overpayment claims. Andrew Goodall finds out how tax advisers can help.

A key element of the government’s financial support for businesses dealing with the economic impact of the coronavirus pandemic is the option for self-assessment taxpayers to defer payment of income tax and NICs. At the time of writing, there is no similar provision for corporation tax.

A ‘time to pay’ arrangement may be appropriate for a company experiencing difficulties. Contact details for HMRC’s payment support service are provided at There are other steps that companies can take proactively to manage the cash flow impact of their corporation tax liabilities, James Morris, head of corporate tax at RSM UK, told Financial Accountant.

These include seeking the timely repayment of tax overpaid because of losses or reduced profits. Figures obtained under a Freedom of Information request show that HMRC repaid corporation tax of £9.1bn in the year to March 2020.

“That figure is going to be dwarfed this year,” says Nikhil Oza, corporate tax director at UHY Hacker Young. “Unfortunately, the application process for requesting refunds where the tax return has not yet been submitted is rather tortuous,” Oza explains, adding that it may be easier to simply file the tax return early.

“This speeds up the process of reclaiming any overpayment and generating a cashflow advantage, which is likely to be particularly valuable as companies try to bounce back from Covid.”


Large companies are required to pay corporation tax in quarterly instalments, based on estimated profi ts. A company with an accounting period ending on 31 December 2020 would normally pay four instalments between July 2020 and April 2021. It may be able to claim a repayment if, by reason of a change in circumstances, the liability for the period is likely to be less than previously calculated. (Corporation Tax (Instalment Payments) Regs 1998 (SI 1998/3175), regs 5 and 6). There are diff erent rules for “very large” companies.


Source: Financial Accountant. Click here to read more

Scroll to Top