The honest answer to this question is that corporation tax does not work the way people expect. Self assessment has fixed late payment penalties at thirty days, six months and twelve months, and most people meet that regime first. Corporation tax does not: late payment costs interest, and the fixed penalties in the corporation tax regime attach to the RETURN rather than to the money.
What is penalised and what is charged
Filing the company tax return late attracts fixed penalties: £200 one day after the deadline, another £200 at three months, an HMRC estimate plus 10% of the unpaid tax at six months and another 10% at twelve months, with the £200 penalties rising to £1,000 each where a return is late three times in a row. Paying late attracts interest, daily, from the day after the due date. The two regimes are separate and a company can be caught by either without the other.
The exception worth knowing about
There is a penalty regime for companies in the quarterly instalment regime that deliberately or carelessly fail to pay instalments they knew were due, which is aimed at behaviour rather than at lateness. For the ordinary company paying at nine months and one day, it does not apply. The practical rule for a small company is simple: file on time to avoid penalties, pay on time to avoid interest, and treat those as two separate obligations.
Why it matters which one you are facing
Because the responses differ. Interest is proportionate and can be reduced by paying part of the liability, so a company short of cash should pay what it has. Filing penalties are fixed and are avoided entirely by filing, which costs nothing but effort, even where the tax cannot be paid. A company in difficulty that files on time and asks for a Time to Pay arrangement is in a much better position than one that does neither, and the difference is entirely within its control.
Questions people ask about corporation tax late payment penalties
Are there penalties for paying corporation tax late?
Not in the ordinary case. Late payment attracts daily interest. The fixed penalties in the corporation tax regime attach to filing the return late, not to paying late.
What are the late filing penalties?
£200 one day after the deadline, another £200 at three months, HMRC's estimate plus 10% of the unpaid tax at six months and another 10% at twelve months. Three late returns in a row raise the £200 penalties to £1,000 each.
What should a company do if it cannot pay?
File on time regardless, which avoids the fixed penalties entirely, and approach HMRC for a Time to Pay arrangement before the due date.