CORONAVIRUS: HMRC may allow tax refunds for anticipated company losses

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RWB_HMRC_May_Allow_Tax_Refunds_For_Anticipated_Company_Losses

HMRC have recently announced that they may allow limited companies to make claims for loss relief and tax refunds even though the current accounting period has not yet ended and the corporation tax return has not been submitted. This will be available to companies of all sizes but they will be required to provide evidence to support the claims. Continue reading our latest article to found out more...

Refunds of quarterly installment payments

Companies with profits in excess of £1.5 million are required to make quarterly instalment payments (QIPs) of their corporation tax liability much earlier than the normal payment date which is 9 months after the end of the accounting period.

For year ended 30th June 2020 a company with profits between £1.5 million and £20 million would be required to pay 25% of the estimated liability on 14th January 2020, 50% on 14th April with further payments due on 14th July and 14th October 2020. Where profits exceed £20 million the payments are due 3 months earlier.

If the same company now anticipates that it will make a loss for year ended 30th June 2020 they may be able to have the tax paid in January and April repaid and the further QIPs reduced to nil. Furthermore, HMRC may allow the losses to be carried back and set against the previous accounting period ended 30th June 2019 resulting in a further tax repayment even though the 30th June 2020 corporation tax return has not yet been submitted.

Note that the £1.5 million and £20 million limits referred to above are divided by the number of companies under common control so for example the limit would be £500,000 per company if there are 3 companies in a group.

Carry back to previous accounting period

Where company profits are below the £1.5 million limit then QIPs will not be due but they may still be able to make a claim to set a loss against profits of the previous accounting period and obtain a tax repayment where losses are anticipated. We can of course help you make a claim and negotiate a tax repayment with HMRC.

Questions? We can help!

As usual, if we can be of assistance please get in touch with us today and let us help you and your business during these difficult times. Contact our Director, Nick Bonnello, directly on 0115 964 8860 or email him at nickb@rwbca.co.uk to utilise your free, 30 minute consultation and find out how we can help you across all areas of your business.

The views provided in this article are for general information purposes only. Nothing in this article represents advice of any nature whatsoever. Accordingly, RWB CA Limited does not accept any liability or responsibility for the information contained in this article or any decision or other action that may be taken in reliance upon the information contained within it. RWB CA Limited accepts no responsibility for any errors of fact or opinion and assumes no obligation to provide you with any changes to its assumptions.  

Tags: Financial planning VAT Tax HMRC Employee Coronavirus Employment Furlough Government Covid-19 Wages Refund

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