Corporation Tax Refunds

Key facts

Overpayments are usually repaid automatically once HMRC processes the CT600.
Trading losses can be carried back to the previous 12 months, generating a refund of CT already paid.
HMRC pays repayment interest on overpaid tax from the later of the due date or the date paid.
Refunds can be made by bank transfer (BACS) or payable order (cheque).
Claims must typically be made within 2 years of the end of the accounting period.

When Do Corporation Tax Refunds Arise?

A company may be entitled to a refund of Corporation Tax in several common situations:^[1]

Overpayment — the company paid more tax than was due, often because the estimate used for payments on account was too high
Loss carry-back — a current-year trading loss is carried back to the previous accounting period, reducing the tax already paid
Amended return — a revised CT600 shows a lower tax liability than was originally declared and paid
Group relief claim — losses surrendered from another group company reduce the claiming company’s liability below what was already paid
R&D tax credit — loss-making companies can claim a payable R&D credit, resulting in a cash refund

Overpayment Refunds

If a company’s CT600 shows a lower liability than the amount already paid, HMRC will usually repay the difference automatically after processing the return.^[4]

No separate claim is required — the refund flows from the information on the return. However, HMRC may:

Offset the overpayment against other tax debts (Corporation Tax, PAYE, VAT, etc.) before making a repayment
Ask for additional information before releasing the refund if the return raises compliance questions

Tip: To speed up the process, make sure your bank details are registered with HMRC (via your Business Tax Account). Refunds by BACS are much quicker than a payable order sent by post.

Loss Carry-Back Refunds

If a company makes a trading loss, it can carry that loss back to set against profits of the previous 12 months. If Corporation Tax was already paid for that earlier period, the carry-back generates a refund.^[2]

The claim is made on the CT600 for the period in which the loss arose, which you can prepare and file online. Key points:

The loss must first be set against any profits of the current period before it can be carried back
The standard carry-back period is 12 months
Extended carry-back of up to 3 years was temporarily available during the COVID-19 pandemic but has now reverted to the standard 12-month rule
Terminal losses (in the final 12 months before a company ceases trading) can be carried back up to 3 years

Example: A company with a year end of 31 March 2026 makes a trading loss of £80,000. It has no other profits in the current year. It can carry the loss back to the year ended 31 March 2025, where it had profits of £100,000. The carry-back reduces the earlier year’s profits by £80,000, and the resulting overpayment is refunded.^[2]

Repayment Interest

HMRC pays repayment interest on Corporation Tax refunds. Interest runs from the later of:^[3]

The date the tax was originally paid, or
The normal due date for the accounting period (9 months and 1 day after the period end)

The repayment interest rate is the Bank of England base rate minus 1%, with a minimum of 0.5%. This rate is significantly lower than the late-payment interest rate HMRC charges on underpayments.

How to Claim a Refund

The route depends on the type of refund:^[1]

Situation	How to Claim	Time Limit
Overpayment (return already filed)	Automatic — HMRC processes after CT600	N/A
Loss carry-back	Claim on the CT600 for the loss-making period	2 years from end of loss period
Amended return (lower liability)	File an amended CT600 through your online account	12 months from original filing deadline
R&D tax credit (payable)	Claim on the CT600 with supporting R&D report	2 years from end of period
Group relief	Claim and consent forms; reflected in amended/original CT600	2 years from end of period

Frequently Asked Questions

How do I get a Corporation Tax refund from HMRC?

If your CT600 shows a lower liability than the amount already paid, HMRC usually repays the difference automatically after processing the return. No separate claim is required for simple overpayments.

Can I carry back a trading loss for a Corporation Tax refund?

Yes. A trading loss can be carried back to the previous 12 months and set against profits of that earlier period. If Corporation Tax was already paid for that period, the carry-back generates a refund.

How long does a Corporation Tax refund take?

Refunds are processed after HMRC reviews the CT600. Registering your bank details with HMRC speeds things up significantly, as BACS transfers are much quicker than cheques sent by post.

Does HMRC pay interest on Corporation Tax refunds?

Yes. HMRC pays repayment interest on overpaid Corporation Tax, running from the later of the date the tax was paid or the normal due date. The rate is the Bank of England base rate minus 1%, with a minimum of 0.5%.

Sources

Claim a Corporation Tax relief — GOV.UK
Corporation Tax: trading losses, carried back — GOV.UK
HMRC interest rates for late and early payments — GOV.UK
Pay your Corporation Tax bill — GOV.UK