If your company or organisation pays too much Corporation Tax, HM Revenue and Customs (HMRC) will repay what you’ve overpaid and may also pay you interest on it.
HMRC’s interest rate is 0.5%.
Use your Company Tax Return to tell HMRC if you think you’re due a Corporation Tax refund (known as a ‘repayment’) and how you want it paid.
If you include your bank details (account number and sort code) on your Company Tax Return, HMRC will automatically refund what you’re owed into your bank account.
If you do not include your bank details, HMRC will use the money you’re owed to pay either:
- other tax your company owes, for example PAYE or VAT
- your next Corporation Tax bill or a late filing penalty (if you do not enter a repayment limit when you submit your next Company Tax Return)
If any part of your repayment is used to pay debts you owe HMRC, you’ll see repayment confirmation in your company tax system. You’ll be refunded the amount left after you have repaid the tax you owe. HMRC will refund the amount left after you’ve repaid the tax you owe, either:
- to the original payment card
- as a payable order, to your registered company address
When HMRC will pay you interest
HMRC will pay you interest if you’ve:
- paid tax early (known as ‘credit interest’)
- paid more than your company owes (known as ‘repayment interest’)
HMRC will usually pay interest from the date you pay your Corporation Tax to the payment deadline.
The earliest date they’ll pay interest from is 6 months and 13 days after the start of your accounting period.
If you pay more than you owe
HMRC will usually pay interest on your refund from either:
- when the tax was due
- when you paid the tax, if you paid after the due date
If you pay in instalments
HMRC automatically pays you the interest after they know your final Corporation Tax bill for the accounting period, which is normally when you file your Company Tax Return.
If you pay by quarterly instalments, your interest is calculated from the later date of either:
- the first instalment date
- the date your balance goes above what you owe