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.
You can either:
- get it paid directly to your company’s bank account or someone else’s account - include the account number and sort code on your tax return
- use it to pay your next Corporation Tax bill or a late filing penalty
- use it to pay other tax your company owes, eg PAYE or VAT
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’)
The interest is taxable - include it as income in your Company Tax Return.
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