HMRC has introduced higher penalties for companies that fail to submit their Company Tax Returns on time.
For Company Tax Returns with a filing deadline on or after 1 April 2026, the automatic late filing penalties have increased significantly. Businesses should ensure their accounting records are kept up to date and that Corporation Tax returns are prepared well before the filing deadline to avoid unnecessary costs.
What’s Changed?
The late filing penalty structure has changed for Company Tax Returns due on or after 1 April 2026.
The new penalties are:
| Time After Filing Deadline | Penalty |
|---|---|
| Up to 3 months late | £200 |
| More than 3 months late | Additional £200 (total £400) |
| Third consecutive late return (up to 3 months) | £1,000 |
| Third consecutive late return (over 3 months) | £2,000 |
These penalties apply even if no Corporation Tax is due.
Late Filing and Late Payment Are Different
It is important to distinguish between:
- Late filing penalties, which apply when your Company Tax Return is submitted after the deadline.
- Late payment interest, which applies if your Corporation Tax is paid after the payment due date.
A company can incur both if it files and pays late.
HMRC’s System Changes
Following the introduction of the higher penalties, HMRC temporarily paused issuing automatic Corporation Tax late-filing penalty notices while updating its systems to apply the new penalty amounts correctly.
Although notices were temporarily delayed, companies remained legally responsible for filing on time, and penalties continued to accrue where applicable. Automatic notices resumed from July 2026.
Example
A company submits its Corporation Tax return four months after the filing deadline.
Potential consequences may include:
- Automatic late filing penalties.
- Interest if Corporation Tax is also paid late.
- Tax-related penalties if the return remains outstanding for six months or more.
- Increased penalties for repeated late filing.
Why This Matters
Many businesses still rely on:
- Incomplete bookkeeping.
- Preparing accounts shortly before the deadline.
- Manual or outdated accounting systems.
As HMRC continues to improve its digital compliance processes, timely and accurate Corporation Tax filing is becoming increasingly important.
How Business Management Consultation Can Help
We can help your business:
- Keep accounting records up to date.
- Prepare statutory accounts well in advance.
- Submit Corporation Tax returns on time.
- Reduce the risk of penalties and interest.
- Maintain compliance with HMRC requirements.
Early preparation is often the simplest way to avoid unnecessary costs.
Conclusion
The increase in Corporation Tax late filing penalties means that missing filing deadlines is now more expensive than ever. With penalties having doubled from April 2026, businesses should review their accounting processes and ensure returns are prepared and submitted on time.
Taking proactive steps now can help avoid avoidable penalties, interest and unnecessary HMRC correspondence.
Call us today on 01273 777 333 to ensure your Corporation Tax returns are filed accurately and on time.
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