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What are HMRC's penalties for a late Corporation Tax return?

£200, then £400, then more.

A fixed penalty starts the day after your deadline and doubles after 3 months. If the return is still missing 18 months after your period ends, your company also pays a share of any tax it has not paid.

Published

At a glance

Deadline
Usually 12 months after the end of the the return covers
Up to 3 months late
£200
More than 3 months late
£400 in total
Still missing 18 months after the period ends
Also 10% of the tax unpaid at that point, or 20% of it if the return arrives more than 2 years after the period ends

Sources

This entry is general information for directors of UK private limited companies, not advice about a particular company.

Does this apply to me?

  • HMRC has sent your company a notice asking for a return. Yes: your company must file, and the penalties apply if it is late.

  • Your company owes no Corporation Tax. Yes: HMRC may still charge the penalty.

  • Your deadline was before 1 April 2026. The older, lower amounts apply: £100 and £200, or £500 and £1,000 for a third late return in a row.

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What to do

  1. Find your deadline. It is usually 12 months after the end of your .

  2. File by that day. The first penalty applies from the day after.

  3. Pay your tax on time, even if the return is late. The later penalty is a share of tax still unpaid, so paying keeps it at nil.

  4. If something outside your control stopped you, file first, then appeal. If you have , fill in HMRC's form online. Then print it and post it.

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How it works

Your deadline is 12 months after your accounting period ends

Your company must file a if HMRC sends it a notice asking for one. HMRC's guidance calls this a "".

The is usually 12 months after the end of the the return covers.

The deadline is a calendar date: the same day of the same month, one year on. The guidance does not say it moves if it falls on a weekend or bank holiday. If it does, file by the working day before.

For example

Bramley Studio Ltd's accounting period ends on 31 December 2026.

The same day one year on is 31 December 2027.

Priya must file the return by 31 December 2027.

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The detail The exact rule

Finance Act 1998, Schedule 18, paragraph 14: the is the last day of whichever of these periods ends last: (a) twelve months from the end of the period for which the return is made; (b) if the company's is not longer than 18 months, twelve months from the end of that period; (c) if the relevant period of account is longer than 18 months, 30 months from the beginning of that period; (d) three months from the date on which the notice requiring the return was served. The relevant period of account is the period of account in which the last day of the accounting period falls (paragraph 14(2)).

For a 12-month return, the filing date is the correspondingly numbered day of the corresponding month of the following year. If the period ends on 28 February in the year before a leap year, the filing date is 29 February. If it ends on 29 February, the filing date is 28 February of the following year (CTM93040). Extra Statutory Concession B46, which gave additional time to file, ended on 31 March 2022 (COM101025).

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The first penalty: £200, then £400

If the return is late, your company pays a fixed penalty. It is the same whatever tax your company owes.

The penalty is £200 if the return arrives within 3 months after the deadline. After that, it is £400. HMRC's guidance shows this as £200 at one day late and another £200 at 3 months. That is the same total: £200 plus £200 is £400.

These amounts apply to returns with a deadline on or after 1 April 2026. The law doubled them from £100 and £200.

For example

Bramley's deadline is 31 December 2027. Say the return arrives on 1 January 2028, one day late.

Penalty
£200

If instead

If instead it arrives on 1 April 2028, more than 3 months late, the penalty is £400.

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The detail The exact rule

Finance Act 1998, Schedule 18, paragraph 17(1) and (2): a company required to a company tax return that fails to do so by the filing date is liable to a of £200 if the return is delivered within three months after the filing date, and £400 "in any other case". It may also be liable to a tax-related penalty under paragraph 18. The amounts were substituted by Finance Act 2026, section 265, with effect for a failure to deliver a return whose filing date is on or after 1 April 2026. The earlier amounts were £100 and £200, and £500 and £1,000 for a third successive failure. HMRC's Company Taxation Manual at CTM94050 still shows those older amounts.

HMRC's sequence has the first flat-rate penalty incurred on the day after the filing date (COM101025). The law and guidance do not say how the last day of the three months is counted. Do not rely on filing on that exact day to keep the £200 amount. There is not normally any partial mitigation of a penalty under paragraphs 17 or 18 (CTM94010).

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After 18 months: a share of any unpaid tax

If the return is still missing 18 months after the end of the accounting period, a second penalty starts. It is added to the fixed penalty.

This second penalty is 10% of the tax still unpaid at that point. If the return arrives more than 2 years after the end of the period, it is 20% of that same amount.

"Unpaid tax" means the tax for that period still unpaid on the day this penalty starts. That is why paying on time matters. If your company has paid its tax by then, this penalty is nil.

HMRC's guidance counts the same steps from the deadline: 10% at 6 months late, and another 10% at 12 months late. That works because the deadline is 12 months after the period ends. So 6 months late is 18 months after the period ends, and 12 months late is 2 years.

When the return is 6 months late, HMRC will write to say how much tax it thinks your company owes. You cannot against that figure. Instead, pay the tax due and file the return. HMRC will then work out the interest and penalties again.

For example

Say Bramley's return arrives on 1 September 2028, after 18 months but within 2 years. None of its £5,225 tax is paid.

Penalty
£5,225.00 × 10%
£522.50

If instead

If instead it arrives on 1 January 2029, more than 2 years on: £5,225.00 × 20% = £1,045.00.

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The detail The exact rule

Finance Act 1998, Schedule 18, paragraph 18(1): a company that fails to deliver a return for an accounting period within 18 months after the end of that period, or by the filing date if that is later, is liable to a , in addition to any flat-rate penalty. Paragraph 18(2): 10 per cent of the unpaid tax if the return is delivered within two years after the end of the period, and 20 per cent "in any other case". Paragraph 18(3): the unpaid tax is the tax payable for the accounting period that remains unpaid on the date the to the penalty arises. HMRC says that where a notice to deliver is given late, or a short accounting period sits at the start of a long period of account, the filing date may fall after the 18-month point. The company then incurs no tax-related penalty if it delivers the return by the filing date (CTM94060). The law and guidance do not say whether the last day of the 18 months, or of the two years, counts as inside the period.

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Three late returns in a row cost more

If your company's return is late 3 times in a row, the fixed penalty for the third is £1,000. After 3 months it is £2,000. HMRC's guidance says the £200 penalties rise to £1,000 each. So £1,000 twice makes £2,000.

The higher amounts carry on for every later late return. They stop once your company files a return on time. If it is late again after that, the normal amounts apply.

For example

Say Bramley's returns for 2026 and 2027 were both late. Its return for 2028 is due on 31 December 2029, and it is late too.

Penalty, up to 3 months late
£1,000

If instead

If it is more than 3 months late, the penalty is £2,000.

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The detail The exact rule

Finance Act 1998, Schedule 18, paragraph 17(3): the amounts are increased to £1,000 and £2,000 for a third successive failure. HMRC's manual (CTM94050) sets out the conditions: the company is for three consecutive accounting periods for which returns have been required, is liable to a flat-rate penalty for each of the first two, and fails to deliver the return for the third. The higher amounts apply to failures in all later accounting periods until the company delivers a return by the filing date. If it then fails for the next period, the lower amounts apply.

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Consequences

If you get it wrong

The penalties add up. The fixed penalty starts the day after the . The share of unpaid tax is added on top after 18 months.

Reasonable excuse. HMRC or may accept that your company had . Then no penalty is charged. HMRC means something that stopped your company filing even though it took reasonable care. You must put things right as soon as you reasonably can once the problem ends.

HMRC gives these examples of a reasonable excuse:

  • the one director who runs the company, or an immediate family member, dies or falls suddenly and seriously ill close to the deadline

  • the records are destroyed by accident, such as in a fire or flood

HMRC does not accept these:

  • your agent was slow

  • information for the return was not ready by the deadline

  • the director was too busy running the

  • the company owed no tax, or had overpaid

  • you did not know the deadline

HMRC does give sympathetic thought to an inexperienced director who gets it wrong and puts it right as soon as they realise.

How to appeal. File the return first. Then fill in HMRC's form online. Do it in one go, because you cannot save it and come back. Print the finished form and post it to the address on it.

Have these ready: your company's , the date and amount on the , and the end date of the accounting period. You also need to explain why the return was late.

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Less common situations

Your accounts cover more than 12 months. If they cover up to 18 months, each return is due 12 months after the accounts end. In HMRC's example, accounts for 15 months to 31 March 2019 give a of 31 March 2020 for the period ending 31 December 2018.

HMRC's notice reached you late. The deadline can be 3 months from the date the notice , if that is later. Then there is no share-of-tax penalty if you file by the deadline, even after 18 months.

Your accounts are due at Companies House after your return. No fixed penalty is charged if the return arrives by that later accounts deadline. This applies only if the return covers the same period as those accounts, or part of it. If you miss that date too, the fixed penalty applies.

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The detail The exact rule

Finance Act 1998, Schedule 18, paragraph 19 (CTM94100): where a company registered under the Companies Act has a return period that coincides with a period for which it must accounts to , and the accounts are due later than the filing date for the return, no flat-rate penalty is chargeable if the company delivers its return by that later date. If it does not, it is liable to the flat-rate penalty as if it had missed the filing date. HMRC says the paragraph strictly requires the return period and the period of account to be the same, but in practice applies it to an accounting period that forms part of a longer period of account, where the accounts are due later than the return. It does not affect any tax-related penalty, and it is not itself a filing date.

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Worked example: Bramley Studio Ltd

Bramley Studio Ltd's is the year to 31 December 2026. Its Corporation Tax for the year is £5,225. The return is due by 31 December 2027. Say none of the tax has been paid.

Penalties by the day the return arrives

  • Return arrives

    31 December 2027

    Fixed
    £0.00
    Share of tax
    £0.00
    Total
    £0.00

    On time

  • Return arrives

    1 January 2028

    Fixed
    £200.00
    Share of tax
    £0.00
    Total
    £200.00

    One day late

  • Return arrives

    1 April 2028

    Fixed
    £400.00
    Share of tax
    £0.00
    Total
    £400.00

    More than 3 months late

  • Return arrives

    1 September 2028

    Fixed
    £400.00
    Share of tax
    £522.50
    Total
    £922.50

    After 30 June 2028, 18 months on: 10% of £5,225

  • Return arrives

    1 January 2029

    Fixed
    £400.00
    Share of tax
    £1,045.00
    Total
    £1,445.00

    After 31 December 2028, 2 years on: 20% of £5,225

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If Priya had paid the £5,225 before 30 June 2028, the share-of-tax column would be £0.00 in every row.

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Not covered here

Interest on tax paid late: see what happens if you pay Corporation Tax late. The separate penalty for not telling HMRC your company must pay Corporation Tax. Penalties for mistakes in a return. Companies House late filing penalties.

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Where this comes from

46 official sources. Open a group to see them.

The law 14 sources
HMRC 15 sources
GOV.UK 12 sources
Companies House 4 sources
FRC 1 source

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