UK companies overpaid £11.9bn in corporation tax last year

UK companies overpaid £11.9bn in company tax the previous 12 months says UHY Hacker Younger, the nationwide accountancy group.

UHY Hacker Younger warns companies that HMRC is not going to mechanically refund them in the event that they overpay company tax. They have to reclaim any overpayment themselves – and in the event that they fail to understand they’ve overpaid, they may miss out on a lot wanted cashflow.

Giant companies pay their company tax primarily based on estimated income for the upcoming 12 months. An overpayment in company tax is an indication that corporations’ accounts groups overestimated income and due to this fact overestimated the quantity of tax they would want to pay.

The issue could be notably dangerous when the financial system is weak, and a companies’ income have fallen from the earlier 12 months.

Nikhil Oza, Company Tax Director at UHY Hacker Younger says: “Overpayment of company tax is a multi-billion-pound drawback. Most massive corporates spot overpayments, or at the least have good tax advisors which do they checking for them, however small corporations with out devoted tax recommendation can lose out on 1000’s in overpaid tax in the event that they don’t look out for the issue.

HMRC received’t inform a enterprise that it’s overpaying company tax, they don’t see it as their job, and the cash will merely sit in HMRC’s account, incomes a really low fee of curiosity. Companies must take the initiative and method HMRC to get their a reimbursement in order that they’ll put these funds to raised use.”

“Many companies are struggling as a result of rising prices and a hunch in client spending, so they need to pay particular consideration to make sure they aren’t making pointless overpayments.

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