Overpaid tax by businesses soars to more than £9bn

UK businesses overpaid at least £9.1bn in corporation tax in 2019-20 up 12.4% from £8.1bn in the previous year, says UHY Hacker Young.

The accountancy firm believes this figure, obtained after a freedom of information request, will be dwarfed this year as the lockdown recession and slumping profits lead to businesses overpaying corporation tax on an even grander scale. 

Corporate tax director Nikhil Oza said: ‘Businesses need to be especially on the ball with requesting a refund when they believe they have overpaid based on the current year’s estimated profits. Unfortunately, the application process for requesting refunds when the tax return has not yet been submitted is rather tortuous and it may be easier to simply file the tax return.’

She suggested that instead of waiting until the tax return deadline, which is 12 months after the company’s year-end, businesses can file this year’s return early. This will speed up the process of reclaiming any overpayment and generating a cashflow advantage.