Get a refund or interest on your corporation tax
If your business or organization pays too much corporation tax, HM Revenue and Customs (HMRC) will refund your overpayment and may also pay you interest.
HMRCThe interest rate is 0.5%.
Use your business tax return to show HMRC whether you think you are entitled to a corporation tax refund (called a ‘rebate’) and how you want it paid.
If you include your bank details (account number and sort code) on your corporation tax return, HMRC will automatically refund what is owed to you to your bank account.
If you do not include your bank details, HMRC will use the money owed to you to pay either:
- other tax your business owes, for example PAYE or VAT
- your next corporation tax bill or a late-filing penalty (if you don’t enter a refund limit when you submit your next corporation tax return)
If part of your refund is used to pay debts you owe HMRC, you’ll see a refund confirmation in your company’s tax system. You will be refunded the remaining amount after paying back the tax you owe. HMRC refund you the remaining amount after you have repaid the tax you owe, either:
- to the original payment card
- as a payable order, to the address of your registered company
When HMRC will pay you interest
HMRC will pay you interest if you have:
- tax paid in advance (called “interest income”)
- paid more than your business owes (called “refund interest”)
HMRC will generally pay interest from the date you pay your corporation tax until the payment deadline.
The first date from which they will pay interest is 6 months and 13 days after the start of your accounting period.
If you pay more than you owe
HMRC will generally pay interest on your refund either:
- when the tax was due
- when you paid the tax, if you paid after the due date
If you pay in installments
HMRC automatically pays you the interest after seeing your last corporation tax bill for the accounting period, which is normally when you file your corporation tax return.
If you pay in quarterly installments, your interest is calculated from the latest date:
- the date of the first payment
- the date your balance exceeds what you owe