As a small business or self-employed person you have the same rights as anyone under HMRC rules to claim a tax rebate if you have overpaid tax to the government, but of course as always, it is all in the interpretation and implementation of the rules.
As premium accountants in London it is our job to understand these rules and ensure that you as our client benefit from any rebate due as part of our accountancy services.
Making the claim
One of the regular questions we get asked as small business accountants is “What happens if I pay too much tax”?
Although there is probably a wide perception that HMRC only collects tax, and that is its sole purpose, that’s typically untrue. However, there are systems in place to pay tax rebates if you qualify, and to assist with tax breaks and tax relief for small businesses, which still deliver a tax boost to your business.
The first part is very simple, if you have paid too much tax, or ‘overpaid’ tax, and you complete a tax return, HMRC are required to make a repayment once they have fully processed your tax return and checked all the details.
If you do not complete a tax return, you can still claim back overpaid tax in various situations.
If you are claiming back a straightforward overpayment of tax this is usually fairly simple, but exactly how you do it really depends on the type of income you receive.
If you overpay tax on your income and you complete a self assessment tax return we can still act on your behalf, although HMRC should theoretically deal with your repayment when they have concluded processing your tax return.
As your accountants in London, we will advise you regarding the section in the tax return where you can request how you would like the repayment to be paid to you. You can have it paid directly into your bank account or you can request that the money is repaid to you with a cheque.
Now there are occasions when HMRC do not follow your instructions and make your repayment back to the last credit or debit card used to make payment on the Self Assessment accounts you recently submitted, although this is stated on the self assessment form many taxpayers can often be caught out.
Not always straightforward
Even if you are an experienced small business owner, it is often the case that HMRC rules can still be a little unclear, and here are a few examples where you will need your small business accountants advice and guidance to ensure that the rebate process runs smoothly, examples being:
If you owe HMRC another amount, for example, a tax credit overpayment, we can request that they manually ‘offset’ the repayment against that amount. Allowing them to take the amount you are due to be repaid from any other amounts you owe, this can also be good for cash flow.
Of course you will still have to pay the rest of any outstanding amounts you owe them, but that’s another matter and our professional accountancy services can deal with that on your behalf.
It may be that you have been making payments on account regarding next year’s tax bill, but once the return is completed it becomes evident that you have paid too much by way of payments on account. We can quickly act and make a claim to reduce those payments and request a refund of the amounts overpaid.
Normally a credit will appear in your Self Assessment account, and as long as there are no other liabilities currently outstanding that HMRC could use the amount in credit against, your payments on account go down.
It’s all part of the professional accountancy services we provide every day, so you get on with running your business and leave HMRC to us.
As highly reputable accountants in London an issue we often get involved with, is correcting errors when businesses have tried to wade their way through the “tax minefield” by themselves.
If you find that you have made a mistake on your tax return and overpaid your tax as a result, then the return needs amending correctly as a first course of action within the appropriate deadline.
HMRC rules are in place regarding time limits for correcting your tax return. The normal time limit under the current guidance is 12 months from the 31 January after the end of the tax year. However, it’s always worth seeking professional help from experienced small business accountants before pursuing this kind of refund as the revised return needs to be perfect.
Wrapping Up
Whether you’re self-employed and work from home or run a limited company with multiple staff, no one likes overpaying tax, and we make sure our clients only pay what is due, and if there is an overpayment or previous errors have been made by your business, you are entitled to a tax rebate.
If you think you qualify for a rebate, call us today for a friendly chat and we can advise you if you qualify or arrange a full tax appraisal.
We are premium London accountants with a wide range of accountancy services available.
