Corporation tax penalties - Landlords Financial | Landlords Bookkeeping Accountants
A company tax return must be filed no later than 12 months after the end of the accounting period to which it relates. However, the corporation tax for that period is due earlier and must be paid by nine months and one day after the end of the accounting period.
So, if a company’s accounting period is the year to 31 March 2026, they will need to file their company tax return by 31 March 2027. However, the corporation tax for the period is due by 1 January 2027.
As the corporation tax due date is before the company tax return filing date, most companies will file the return on time as it will make sense to do the return before the corporation tax is paid.
However, there are consequences if the return is filed late or the tax is paid late.
Late filing penalties
Penalties are charged if the company tax return is as little as one day late. Further penalties are charged if the return remains outstanding three months, six months and 12 months after the due date.
The penalties charged are shown in the table below.
Period after deadline Penalty
1 day £200
3 months A further £200
6 months A further penalty of 10% of the amount of tax which HMRC estimate to be outstanding
12 months A further penalty of 10% of any unpaid tax
Persistent late offenders are fined more heavily – if the company tax return is late three times in a row, the £200 penalties are each increased to £1,000.
Taxpayers with a reasonable excuse (in HMRC’s eyes) for filing their return late can appeal against any late filing penalties charged. However, they must have filed the return before appealing.
Where the company tax return has not been filed six months after the due date, HMRC will decide how much corporation tax the company must pay. This is known as a tax determination. A company cannot appeal against this. However, once they
have filed their company tax return and paid the tax due, HMRC will recalculate the penalties and interest based on the actual liability.
Late paid corporation tax
There are no penalties for paying corporation tax late. However, interest is charged at a rate of 4% higher than the Bank of England base rate from the due date until the date on which payment is made.
Corporation tax penalties - Landlords Financial | Landlords Bookkeeping Accountants
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