TITLE: Corporation Tax Late-Filing Penalties Doubled from 1 April 2026
If your Corporation Tax return has a filing date on or after 1 April 2026, the fixed penalties for filing late have doubled. Here’s what the change means for your UK limited company accounting, how your filing and payment dates differ, and what you can do now to keep both on track.
The new penalties make late filing more expensive
The updated fixed penalties apply according to your return’s filing date, not simply the date your accounting period ends. For returns with a filing date on or after 1 April 2026, the amounts are:
| Situation | Previous penalty | New penalty |
|---|---|---|
| Return is late | £100 | £200 |
| Return is more than 3 months late | A further £100 | A further £200 |
| Three successive late returns: first penalty | £500 | £1,000 |
| Three successive late returns: further penalty after 3 months | A further £500 | A further £1,000 |
For a first late return, that means a £200 fixed penalty when it is late, rising to £400 in fixed penalties if it remains more than three months late. If your company has filed late for three successive returns, the corresponding fixed penalties can reach £2,000 once the return is more than three months late.
These are filing penalties. Separate tax-geared penalties may also apply if the return remains outstanding and tax is unpaid. HMRC’s policy paper on the Corporation Tax late-filing penalty increases sets out the new rates.
Repeated delays put small and growing companies under pressure
A missed filing date can happen when sales records arrive late, a finance team is stretched, or bookkeeping is left until year-end. But a growing business may have more transactions to reconcile and less time to resolve gaps at the last minute.
The increased penalties matter especially if your company has had previous late returns. Keep an eye on the sequence of filings, not just the next deadline. A late return can cost more when it forms part of three successive failures.
Filing late can also lead to additional penalties if Corporation Tax remains unpaid. HMRC’s late-filing guidance says tax-geared penalties can apply at six and twelve months. So, even if you expect a refund or believe no tax is due, file on time: the fixed filing penalties can apply regardless.
Keep the payment date separate from the filing date
For a standard accounting period, the Company Tax Return is due 12 months after the end of the accounting period. Corporation Tax is usually due earlier: nine months and one day after the period ends, where taxable profits are within the normal payment threshold. Companies with profits above the threshold may have to pay by instalments. Check HMRC’s guidance on paying your Corporation Tax bill.
These deadlines do different jobs. Filing your return does not defer the tax payment date, and paying your tax does not replace the requirement to file the return. HMRC charges daily interest if Corporation Tax is late or underpaid, from the day after the payment deadline until it is paid. See its guidance on Corporation Tax interest charges.
You may encounter claims that Corporation Tax late-payment surcharges of 1%, 2%, 3% and 4% apply at five, six, seven and eleven months. That is not the current Corporation Tax late-payment rule described by HMRC. HMRC says that Corporation Tax late-payment penalties have not been implemented; late-payment interest applies instead. The 10% tax-geared penalties at six and twelve months relate to a late Company Tax Return, not a separate monthly late-payment surcharge.
Use this checklist before filing
Work through these steps early. They reduce the risk of missing information holding up your return.
- Confirm the accounting period and filing date. Check the return period against your HMRC notice to deliver a Company Tax Return. A company’s accounting period can differ from its financial year.
- Close off your bookkeeping. Reconcile bank accounts, payment providers and business cards so that transactions are not missing or duplicated.
- Match sales to the records. For online businesses, reconcile marketplace and payment-processor statements to orders, fees, refunds and payouts. This helps ensure revenue and costs are represented accurately.
- Review expenses and supporting evidence. Gather invoices, receipts and records for business purchases. Flag anything unclear before accounts preparation.
- Check stock and outstanding balances. Record year-end inventory where relevant, plus amounts owed by customers and to suppliers.
- Review payroll, VAT and director transactions. Make sure relevant balances and records are complete, including any money introduced to or taken from the company.
- Agree any information gaps promptly. Give your accountant a clear list of unresolved items so they can be investigated before submission.
- Plan payment separately. Check the tax payment date, allow enough time for the chosen payment method to clear, and contact HMRC promptly if you cannot pay in full. This helps you understand your options before the debt grows.
Example: a small ecommerce Ltd with a 30 September year end
Assume a small ecommerce company has an accounting period ending 30 September 2026, and taxable profits are within the standard payment threshold.
- Corporation Tax payment deadline: 1 July 2027-nine months and one day after the year end.
- Company Tax Return filing deadline: 30 September 2027-12 months after the year end.
The payment date is not 1 January 2027. Keeping these dates distinct gives the company time to prepare its return while ensuring the tax payment is scheduled earlier.
If the company files by 30 September 2027, it avoids a late-filing penalty. If it files one day late, the new fixed penalty is £200. If it remains more than three months late, another £200 can apply, bringing the fixed filing penalties to £400 for a first late return. If the company has three successive late returns, the increased penalties can reach £2,000 once the latest return is more than three months late.
Those figures do not include any tax-geared late-filing penalty if the return remains outstanding and tax is unpaid. Nor do they include late-payment interest if the company misses 1 July 2027. The precise interest depends on the applicable HMRC rate and how long the tax remains unpaid.
Keep records organised throughout the year
A year-end filing is much easier when your accounting records are complete and up to date. Keep business and personal finances separate, and retain sales records, purchase invoices, bank statements, stock information and evidence for company spending. For an ecommerce company, include reports from marketplaces and payment providers so that fees, refunds and payouts can be reconciled.
HMRC’s guidance says companies must keep accounting records and generally reta