Corporation Tax penalties
How HMRC and Companies House penalise late accounts and late tax, and how to mitigate the damage.
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Corporation Tax late filing penalties
What HMRC and Companies House charge for late accounts and late tax returns, and how the penalties build over time.
Corporation Tax late payment penalties
Late payment of Corporation Tax triggers daily interest from HMRC. Here is how the rate works and how to limit the damage.
Late CT600: how the penalties stack
£100 the day the return is late, another £100 at three months. At six months HMRC raises a determination and adds a penalty of 10% of the unpaid tax; at twelve months, a further 10%. File late three accounting periods running and the flat penalties step up.
The determination is the nasty part: HMRC estimates your tax and the estimate stands — enforceable — until a real return displaces it. Estimates are not built to be generous.
Late payment costs interest — and attention
Corporation Tax paid after the due date accrues daily interest, automatically, from nine months and one day after the period end. Persistent late payment invites enforcement and, for larger debts, security demands.
The inversion worth remembering: because payment falls due before the filing deadline, a company that leaves the accounts late is also flying blind on a payment already overdue. Preparing accounts early is what makes the payment date safe.
Companies House penalties are separate and automatic
Late statutory accounts collect their own penalty from Companies House — £150 rising to £1,500 for a private company by six months late, doubled when accounts are late two years running. There is no discretion in the scale, and it applies even if HMRC's side is fully up to date.
Two regulators, two clocks, one set of accounts. Which is the argument for one process that files both well before either deadline.
Errors on the return: behaviour-based penalties
Inaccuracies in a CT600 fall under the same regime as every other tax: nothing for reasonable care, up to 30% of the extra tax for carelessness, more for deliberate conduct, with substantial reductions for unprompted disclosure. Amend errors when found — the return can be amended within twelve months of the filing deadline, and disclosure after that.
For RR company clients the whole section is managed through Deadline Lock and reconciled monthly records: accounts early, payment known in advance, return filed with evidence behind every figure.
Frequently asked questions
What if my company can't pay its Corporation Tax?
File everything on time regardless, then arrange Time to Pay with HMRC before the due date if possible. Interest runs either way, but an arrangement stops escalation and enforcement. Filing late as well merely adds penalties to a cash problem.
What is an HMRC determination?
HMRC's own estimate of your Corporation Tax, raised when a return is six months late. It is legally enforceable as if it were your figure, and only filing the actual return replaces it. Companies discover determinations are rarely underestimates.
Can CT penalties be appealed?
Yes — reasonable excuse for lateness, within 30 days of the notice, on the same standards as other taxes: genuine, evidenced events that prevented filing, remedied promptly. The bar is high; the appeal is worth making when the facts are real.
My company is dormant — do the penalties still apply?
If HMRC has issued a notice to file, a return is due even for a dormant company, and lateness is penalised normally. Tell HMRC the company is dormant and get the notice withdrawn — silence plus a notice equals penalties for a company earning nothing.