Corporation Tax HMRC Repayment cheque each year

[northernladuk]

Set it up in online banking to pay right on the due date.

If the cheque is only for a quid or so then chuck it in the shredder.

Hmmm, if only I could re-direct all those unclaimed £1's to my account.... maybe superman will come and save me if I get caught!

[Wanderer]

Each year after paying Corporation tax I get a repayment cheque for a few quid from HMRC, for interest for the days before the deadline. (I always pay early)

Set it up in online banking to pay right on the due date.

If the cheque is only for a quid or so then chuck it in the shredder.

[ASB]

Just like bank interest, any interest you receive for early payment of your corporation tax is treated as taxable income for the company, and it will contribute to your next years taxable income. Take a look at;
HM Revenue & Customs: Interest paid when Corporation Tax is overpaid or paid early

That is pretty clear, it's chargeable (and allowable if interest is paid).

I had always excluded it on the advice of my accountants, further digging and it appears the change was when CTSA was introduced. I guess I'd done it wrong for quite a number of years. Oops.

[Sockpuppet]

Does it matter? Surely paying tax on a £1 means you're still better off than if you didn't receive the £1. If it's that much of a hassle shred the cheque.

[Greg@CapitalCity]

Hmm, why is that? Because the CT amount reduces by the amount of interest it earns if paid early?

Just like bank interest, any interest you receive for early payment of your corporation tax is treated as taxable income for the company, and it will contribute to your next years taxable income. Take a look at;
HM Revenue & Customs: Interest paid when Corporation Tax is overpaid or paid early

[richy]

No you won't. It's excluded from the CT calc.

Hmm, why is that? Because the CT amount reduces by the amount of interest it earns if paid early?

I've always understood interest was included in the next CT calc. (I also was including CT interest, and bank account interest in the Flat Rate VAT calc until that was changed this year)

Cheers, rich

[richy]

Does this help?




HM Revenue & Customs: No Corporation Tax to pay and refunds

Fantastic, thanks!

[ASB]

I just go one of these, and realised, I will have to pay corporation tax next year on this corporation tax interest payment as it contributes towards profit.

No you won't. It's excluded from the CT calc.

Edit: not now it isn't.

[JoJoGabor]

I just go one of these, and realised, I will have to pay corporation tax next year on this corporation tax interest payment as it contributes towards profit.

[richy]

Hi all

Each year after paying Corporation tax I get a repayment cheque for a few quid from HMRC, for interest for the days before the deadline. (I always pay early)

Anyone found a way to avoid the cheques? Can they make repayment directly to a bank account? I couldn't spot a setting anywhere.

I don't even have a paying in book, so each time I get a cheque I need to manually deal with it, and post it to our bank!

Cheers, rich