HMRC paid out £4.6 billion in corporation tax refunds last year, according to a report by accountancy firm UHY Hacker Young.
The data obtained by the top 20 accounting firm reveals that around 286,000 businesses received a corporation tax rebate in the tax year ending March 31st 2013.
On average, each company received more than £16,000 in tax repayments.
Roy Maugham, tax partner at UHY Hacker Young, said:
“UK businesses are still finding that they are overpaying their corporation tax in the billions of pounds.
“It shows how important it is for companies to regularly review any overpayment of tax as HMRC will not be looking to see if they owe them money.”
Although the number of tax rebates has fallen over the past few years – from 346,000 in the same period ending in 2012, and 386,000 in 2011 – HMRC does not appear to be speeding up repayment processes.
It can still take up to 24 months to organise a rebate. This could leave companies out of pocket.
“Companies have a difficult line to tread when it comes to accurately predicting their performance for the year ahead.
“If they underestimate their profits, HMRC will charge them interest on the difference underpaid. Overestimate profits and they could be handing over large amounts of tax unnecessarily to HMRC which will then have to be recovered.”
A spokesperson for HMRC said the tax man sometimes needs to carry out additional checks on repayment claims to prevent attempted fraud. These security checks may delay repayments on occasion.
Photo by Paul Downey