Corporation Tax 'permanent overpayments' scam

HMRC sitting on large amounts of taxpayer money as 'permanent overpayments'

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Has anyone else noticed how HMRC transfers small credit amounts on Corporation Tax accounts (often arising from interest on CT paid a day or so early) into 'permanent overpayment'.  The amounts are usually small for each tax year, and even over a six year period not worth the cost of phoning or writing to recover.

I have never seen HMRC carry these amounts forward unprompted, and countrywide they must be sitting on a significant of taxpayers' money.

Is the best course to work out six years' worth of 'permanent overpayments' and advise clients to underpay the current year by that amount?


Replies (2)

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Danny Kent
By Viciuno
23rd May 2024 11:41

For the amounts at stake I wouldn't bother. To be fair they often write off small underpayments (small underpayments and late payment interest) so it's not a one way street for a change!

You'd then have the thankless task of calling HMRC to request the amounts be unlocked and used to pay the underpayment. This would undoubtedly cost more (in your time) than any savings made, and their computers would most likely say no. It would probably need to be referred and you'd spend the next 6 months telling the client to ignore the CT demand letter and periodically calling to HMRC to follow this up.

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By Paul Crowley
23rd May 2024 11:44

Sounds a good solution. But the admin and conversations would exceed most of these.
They only seem to keep fairly small figures.

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