HMRC have updated their Corporation Tax guidance covering situations where a company seeks repayment of tax before a return has been filed. Such a case may be where a business knows that it has suffered large losses due to the Coronavirus.

The most common example of this will occur when a company that has paid tax for:

  • Accounting period 1 (AP1) on or before the normal due date of nine months and one day after the accounting period ends.
  • During accounting period 2 (AP2) it believes it will make a loss that it intends to carry back to AP1.
  • Until the accounting period has ended no allowable loss has crystallised and the company cannot anticipate losses/reliefs and obtain repayment unless it makes a special claim, see HMRC: CTM92090.

For a large company, paying tax by instalments, it will usually be liable to pay under the quarterly instalment payments regulations and will usually pay its Corporation Tax liability before it delivers its company tax return.

It may apply for repayment of the excess total liability for the accounting period is likely to be less than previously calculated, see HMRC:CTM92650

The changes follow representations made by the Institute of Chartered Accountants in England & Wales (ICAEW)’s Tax Faculty.


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