Refunds of Quarterly Instalment 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 30 June 2020 a company with profits between £1.5 million and £20 million would be required to pay 25% of the estimated liability on 14 January 2020, 50% on 14 April with further payments due on 14 July and 14 October 2020. Where profits exceed £20 million the payments are due 4 months earlier.
If the same company now anticipates that it will make a loss for year ended 30 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 30 June 2019 resulting in a further tax repayment even though the 30 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 within a 51% group so for example the limit would be £500,000 per company if there are 3 companies in a group.
For further information on making a claim, please contact Alan Rolfe on 023 8046 1235.