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 won’t robotically refund them in the event that they overpay company tax. They need to reclaim any overpayment themselves – and in the event that they fail to understand they’ve overpaid, they’ll miss out on a lot wanted cashflow.
Massive companies pay their company tax based mostly on estimated earnings for the upcoming 12 months. An overpayment in company tax is an indication that corporations’ accounts groups overestimated earnings and subsequently overestimated the quantity of tax they would wish to pay.
The issue will be notably unhealthy when the economic system is weak, and a companies’ earnings 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 downside. Most massive corporates spot overpayments, or not less than have good tax advisors which do they checking for them, however small corporations with out devoted tax recommendation can lose out on hundreds 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 refund in order that they will put these funds to raised use.”
“Many companies are struggling because of rising prices and a stoop in shopper spending, so they need to pay particular consideration to make sure they aren’t making pointless overpayments.