An extra 2bn in tax returns for British firms
A jump of 40 per cent to £7bn.
British businesses received an extra £2bn in corporation tax returns from HMRC this tax year, a jump of 40 per cent to £7bn.
However, delays in paying refunds continued to cause serious issues for businesses, particularly those that have been already struggling, according to research from UHY Hacker Young.
According to the report, businesses can face “a real lottery” on corporation tax refunds, with some paid quickly and others having to wait months.
Hacker Young said that last year the average amount paid out for each approved claim was £20,231, with 346,000 businesses receiving refunds.
John Ierston, partner at UHY Hacker Young said refund delays can be “particularly galling as the money should be in a business’ bank account, not sat with HMRC. A missing corporation tax refund will aggravate the difficult financial situation a business might be in that led to the need for a refund in the first place.”
Hacker Young adds that further government cuts to HMRC’s budget and a greater focus on avoidance and evasion issues could be leaving the Revenue “under-resourced for basic processes.”
It said the jump in the number of refunds issued by HMRC is probably down to the slower than anticipated economic recovery or greater awareness of research and development (R&D) relief.
Ierston said, “The sharp increase in the number of businesses applying for refunds suggests that businesses have been over-confident about their profit predictions recently. Many businesses were clearly expecting the economy to recover much faster than it has done.”
“The rise may also include increased R&D relief payments made to small businesses following the rise in the value of the relief to 200 per cent from 175 per cent.”
This story first appeared on economia.