Home News Business News HMRC sitting on £11.9bn in overpaid corporation tax


HMRC sitting on £11.9bn in overpaid corporation tax

Businesses overpaid £11.9bn in corporation tax in the last tax year, with HMRC unlikely to address over-payments unless the company realises the mistake

The latest figures for tax year 2022-23 show that £11.9bn has been overpaid by UK businesses.

They must reclaim any over-payment themselves and if they fail to realise they have overpaid, they will miss out on much needed cash-flow.

Large businesses pay their corporation tax based on estimated profits for the upcoming year. An over-payment in corporation tax is a sign that companies’ accounts teams overestimated profits and therefore overestimated the amount of tax they would need to pay.

The problem can be particularly bad when the economy is weak, and a businesses’ profits have fallen from the previous year.

HMRC won’t tell a business that it is overpaying corporation tax, they don’t see it as their job, and the money will simply sit in HMRC’s account, earning a very low rate of interest.

Businesses need to take the initiative and approach HMRC to get their money back so that they can put those funds to better use.

Many businesses are struggling due to rising costs and a slump in consumer spending, so they should pay special attention to ensure they aren’t making unnecessary overpayments.

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