Corporation Tax Refund: How to Claim Back Overpaid Tax from HMRC

Corporation Tax Refund: How to Claim Back Overpaid Tax from HMRC

If your company has overpaid corporation tax, HMRC owes you money. Here's how to get it back.

When You Might Be Owed a Refund

There are several situations where your company could be due a corporation tax refund:

1. You Overpaid on Account

You estimated your tax bill and paid too much. This is the most common reason for refunds.

2. You Filed an Amended Return

Your original CT600 had errors — maybe you forgot to claim allowable expenses. After amending, your tax bill is lower than what you already paid.

3. Loss Carry-Back

Your company made a loss this year and you're carrying it back to a profitable previous year. This reduces the previous year's tax bill, creating a refund.

4. R&D Tax Credits

You claimed R&D tax relief and the credit exceeds your tax liability. The excess is payable as a cash refund.

5. Capital Allowances You Didn't Claim

You purchased equipment or assets but forgot to claim capital allowances. Amending your return reduces your tax bill.

6. Group Relief

Another company in your group surrendered losses to your company, reducing your tax liability below what you paid.

How to Claim a Corporation Tax Refund

Method 1: Automatic Refund via CT600

When you file your CT600 and the tax calculated is less than what you've already paid, HMRC automatically processes a refund. Your CT600 shows this in Box 485 (tax repayable).

What you need to do:

1. File an accurate CT600 showing the correct tax liability
2. Ensure your payment records with HMRC are correct
3. Wait for HMRC to process the return

Method 2: Amend a Previous Return

If you've already filed but realise you overpaid:

1. File an amended CT600 for the relevant period
2. Include the additional expenses, allowances, or corrections
3. The amended return shows a lower tax liability
4. HMRC refunds the difference

Time limit: You can amend a CT600 up to 12 months after the filing deadline.

Method 3: Carry Back Losses

If your company made a trading loss:

1. File the CT600 for the loss-making period
2. Claim the loss carry-back in the return (or by amending the previous year's return)
3. HMRC recalculates the previous year's tax
4. The difference is refunded

Carry-back limit: Normally 12 months. Extended to 3 years for losses in accounting periods ending between 1 April 2020 and 31 March 2022 (COVID measure — now expired).

Read more about loss carry-forward and carry-back.

Method 4: Write to HMRC

For refunds that don't fit neatly into a CT600 amendment:

• Write to your company's Corporation Tax office
• Include your UTR, company name, CRN, and the period
• Explain why you believe a refund is due
• Include supporting calculations

HMRC address: The address is on your company's tax correspondence, or use the online account.

How Long Does a Corporation Tax Refund Take?

Faster refunds: Filing electronically (not paper) speeds up processing. HMRC prioritises electronic returns.

How HMRC Pays Your Refund

HMRC will either:

1. Bank transfer — if they have your bank details on file (fastest)
2. Payable order (cheque) — posted to your registered office
3. Offset against future liability — applied to your next CT bill

To set up bank details for refunds, use your HMRC online account.

What If HMRC Opens an Enquiry?

HMRC can enquire into your return within 12 months of the filing date. If they do:

• The refund may be delayed until the enquiry is resolved
• You'll need to provide evidence for your claims
• Simple errors are usually resolved quickly
• Complex claims (especially R&D) may take months

Keep records: Always retain receipts, invoices, and calculations that support your claim. HMRC may ask for evidence.

Common Mistakes When Claiming Refunds

Not Checking Your HMRC Account Balance

Sometimes HMRC holds a credit on your account from previous overpayments. Check your online account before making your next payment.

Missing the Amendment Window

You have 12 months from the filing deadline to amend. After that, you need to use HMRC's overpayment relief claim (within 4 years).

Forgetting to Claim Allowable Expenses

The most common reason for overpayment is not claiming all your allowable expenses. Common missed expenses:

• Working from home costs
• Professional subscriptions
• Software and tools
• Travel and subsistence
• Training costs

Not Claiming Capital Allowances

If you bought equipment, vehicles, or other assets, Annual Investment Allowance lets you deduct up to £1 million per year from your profits.

Interest on Late Refunds

If HMRC takes too long to process your refund, they must pay interest on the amount owed. The current repayment interest rate changes periodically — check HMRC's website for the latest rate.

Can You Claim a Refund for Previous Years?

Yes, but there are time limits:

If you're outside the 12-month amendment window but within 4 years, you can make a standalone claim to HMRC.

File Accurately and Avoid the Hassle

The best way to handle corporation tax refunds is to get your CT600 right the first time. Claim all your allowable expenses, apply the correct tax rates, and file before the deadline.

Taxpipe calculates your corporation tax automatically, applies all available reliefs, and files directly with HMRC — reducing the chance of overpayment in the first place.

£59 per filing. No accountant needed.

File your CT600 with Taxpipe →

Related Articles

• Corporation Tax Allowable Expenses — Complete List
• CT600 Amendments: How to Correct Mistakes
• Corporation Tax Losses: Carry Forward and Back
• R&D Tax Relief for Small Companies
• How to Pay Corporation Tax to HMRC
• Corporation Tax Refund: How to Get Money Back If You Overpaid HMRC
• HMRC Corporation Tax Refund: How Long Does It Take?