When would HMRC owe my company money?
Four everyday situations put a company on the right side of this, and none of them means anyone did anything wrong.
You paid before the bill was final, and the bill came in lower. The tax is due before the return is, so lots of directors pay an estimate. If you paid £8,000 in good time and the finished return says the real bill was £7,200, HMRC is holding £800 of your company's money. Our guide to the Corporation Tax deadlines shows why the payment date lands before the filing date.
You paid twice, or paid the wrong amount. It happens more than you would think, for example when a reminder letter crosses in the post with a payment you already made.
You amended a return downwards. If you spot a mistake after filing, say an expense you forgot to claim, correcting the return can shrink the bill below what you already paid. The correction itself is a normal, allowed step, and our guide on amending a Company Tax Return walks through it.
You made a loss this year after a profitable last year. A loss this year can be set against last year's profit, and that can generate a refund of tax the company already paid. There are conditions and a time limit, so read our guide on Corporation Tax losses before counting on it.
How do I actually get the money?
- Tell HMRC through your Company Tax Return. The return is where you say you think a repayment is due and how you want it paid. There is no separate refund application for the ordinary cases.
- Put the company's bank details on the return. If the account number and sort code are on the return, HMRC refunds what you are owed straight into that account, automatically. Putting the bank details on every return you file means any repayment is processed more quickly.
- No bank details? Expect the slow way. HMRC then sends a payable order, which works like a cheque, to your registered company address.
- If the overpayment only appeared after you filed, correct the position by amending the return. For a loss carried back, you can claim in the return itself, in an amendment, or even in a letter, as long as you claim within 2 years of the end of the loss-making year.
- Know the one catch. If your company owes HMRC other tax, for example PAYE or VAT, HMRC settles that first and repays what is left.
How long does it take? HMRC does not publish a number of days, so we will not invent one. What gov.uk does say is that bank details on the return make the repayment quicker, which is exactly why we ask for them up front.
Does HMRC pay interest on my money?
Yes, and you do not have to ask for it. HMRC pays interest when you paid tax early, which it calls credit interest, and when you paid more than the company owed, which it calls repayment interest.
For an early payment, interest runs from the day you paid up to the payment deadline, though never from earlier than 6 months and 13 days after the start of your accounting period. For an overpayment, it runs from the day the tax was due, or from the day you paid if that was later.
Be realistic about the amounts. The rate on gov.uk was 2.75% when we last checked, so £1,000 refunded three months after the due date earns roughly £7. Worth having, not life changing. One wrinkle worth knowing: the interest counts as income, so it goes into your next Company Tax Return.
What does this look like when you file with us?
When you file with SimpleReturns, your repayment bank details go on the return itself, so if a refund is ever due it lands back in the company account without you chasing anyone. Filing is free to start, no card needed, and costs £99 flat per submission.
One honest limit: if a past year needs properly reopening, beyond a straightforward amendment or a loss claim within its time limit, that is accountant territory, and we would rather tell you that plainly than pretend software fixes everything.