Corporation Tax due soon: Not necessarily.
24th September 2020Companies with 31 December 2019 year ends will be due to pay their corporation tax on 1 October 2020. If that company is expecting to suffer a loss during the 2020 financial year, perhaps due to COVID-19 related reasons, it should be possible to carry that loss back one year and claim a refund of all or some of this tax. This process is not usually possible until after the year end has passed, after the loss has been calculated, after the company tax return has been submitted and after a number of weeks have passed to allow HMRC to security check then release the refund. The time taken for these processes could well accumulate to Spring next year, at the earliest. Not very helpful if you are currently having cash flow problems and are struggling to find the tax money in the first place.
As part of general Government measures to support businesses during COVID-19, HMRC have announced that they will now accept early loss relief claims in the aforementioned ‘exceptional’ circumstances:
This means that early provisional loss relief claims can be made now, to reduce the tax before it is payable, and hence not further damage your cash position.
Disclaimer - All information in this post was correct at time of writing.
