Corporation Tax Penalties

Even if your business is in spin you should not neglect your company’s accounts and tax returns as late filing and late payment of corporation tax could result in huge penalties.

Although the deadline for filing the corporation tax return is one year after the end of the accounting period, the corporation tax bill is payable nine months and one day after the end of the period. For example, the accounts of Property Ltd for the year to 30 June 2018 must be filed alongside its corporation tax return by 30 June 2019 but the corporation tax for the year to 30 June 2018 must be paid by 1 April 2019.

If you forget to pay the tax and file the corporation tax return more than six months late, HMRC will issue a penalty of 10% of the unpaid tax plus £200 for being more than three months late. A further 10% of the unpaid tax will be charged if the corporation tax return and payment are 12 months late.


Property Ltd has corporation tax of £300,000 to pay for the year to 30 June 2018. It has not filed its corporation tax return for that period by 30 June 2020 and nor has it paid its corporation tax. HMRC will charge a penalty of £60,000 (2 x 10% x £300,000) plus £200 for being over three months late with the corporation tax return.

If Property Ltd had paid its corporation tax bill by 1 April 2019 the penalties charged in 2020 would be restricted to £200.