Muras Matters: Increase In Corporation Tax Late Filing Penalties

Background

The filing deadline for a company to submit a corporation tax return to HM Revenue & Customs (HMRC) for an accounting period is 12 months after the end of that accounting period, which is usually the same as its financial period end. Penalties apply where a return is submitted late.

For corporation tax returns that have a filing date of 1 April 2026 or later, these penalties have now doubled.

Detail

The amount charged as a penalty for the late submission of a corporation tax return depends on how late the return is when submitted, and whether there have been any repeated failures to file returns on time.

For returns with a filing date on or after 1 April 2026, penalties have now doubled. The penalty for being even one day late in submitting a return was previously £100, and this has now increased to £200. The following table sets out the increase in the filing penalties:

The penalties were previously set in 1998 and HMRC have said their relative value and behavioural impact has been eroded over time. With the increase HMRC aim to “restore their original real terms value”.

The penalties, which are generally non-mitigable, are charged by the issue of a penalty notice. HMRC’s corporation tax computer system automatically generates the penalty notices shortly after the date the penalty is incurred. However, HMRC has recently advised that companies that file their tax returns late may receive penalty notices later than usual. This is because HMRC is in the process of updating its systems for the increases in penalty amounts, effective from 1 April 2026.

If you would like more information on any of the points raised above or if you require our assistance completing a corporation tax return please contact our Tax Director, Jenny Marks.

To see our other news items please visit our Muras Baker Jones – Blog.