Corporation Tax is charged as a percentage of the annual profits made by a company. The rate is 19% for the tax year 2018-19 and will be further reduced to 17% for the year starting 01 April 2020.
Has your company paid too much Corporation Tax? If this is the case HM Revenue & Customs (HMRC) will repay what has been overpaid. In addition, they may also pay interest at 0.5%.
To request the refund (repayment) all that needs to be done is to complete a tax return and state how you would want this paid.
You can either:
- Have this paid directly to the Company’s bank account or someone else’s account.
- Use it to pay any other taxes the company may owe, e.g. VAT or PAYE.
- Use it to pay any late filing penalties or the next Corporation Tax bill.
HMRC will pay interest from date you paid the Corporation Tax to the payment deadline. The earliest HMRC will pay interest from is six months and 13 days after the start of your accounting period.
For example, if your accounting period starts on 1 February 2018 and ends on 31 January 2019, you can pay your Corporation Tax any time between 13 July 2018 (this is six months and 13 days after the start of your accounting period) and 1 November 2019 (which is HMRC’s deadline for payment).
HMRC may pay you interest for the period 13 July 2018 to 1 November 2019 at the annual rate of 0.5%. However please keep in consideration that as the company year was still in progress, the amount of Corporation Tax you paid would be an estimate.
Please note the interest income needs to be included in your company accounts and will therefore be taxable.