Late filing penalties for a company tax return are fixed, escalating and entirely avoidable, and they apply whether or not the company owes any tax. A dormant company that ignores a notice to deliver accrues the same charges as a trading one, which is the single most common way a company with nothing to pay ends up owing HMRC money.
The scale
One day after the deadline, £200. Three months late, another £200. Six months late, HMRC estimates the corporation tax bill and adds a penalty of 10% of the unpaid tax. Twelve months late, another 10% of the unpaid tax. Where a company files late three times in a row, the £200 penalties are increased to £1,000 each. The deadline itself is twelve months after the end of the accounting period, three months after the tax was due.
The determination at six months
The estimate HMRC makes at six months is not a guess the company can ignore. It is a determination, it is legally enforceable, and it can only be displaced by filing the actual return. A company that receives one and does nothing is liable for HMRC's figure regardless of whether its real profit was lower, and interest runs on that amount. Filing is the only response that works.
Reasonable excuse
Penalties can be appealed where there is a reasonable excuse: something unforeseen and outside the company's control that prevented filing, with the return submitted without unreasonable delay once the excuse ended. Serious illness of the person responsible, a failure of HMRC's own service and a genuine postal or software failure have all been accepted. Pressure of work, relying on an agent who did not file, and not having the money have not.
Questions people ask about corporation tax late filing penalties
What is the penalty for filing a company tax return late?
£200 after one day, another £200 at three months, 10% of the unpaid tax at six months on HMRC's own estimate, and another 10% at twelve months.
Do penalties apply if there is no tax to pay?
Yes. The fixed £200 penalties attach to the return, not to the tax, which is why dormant companies that ignore notices accumulate them.
Can late filing penalties be appealed?
Where there is a reasonable excuse: something unforeseen and outside the company's control, with the return filed without unreasonable delay afterwards. Pressure of work and reliance on an agent are not reasonable excuses.