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Last updated: 1 Feb 2022
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What are the penalties for late filing of Corporation Tax returns?

Filing your Corporation Tax return can be an exhausting process. There’s lots to do but setting up the right processes from the start can help simplify the process. Unfortunately, there may be times when you just can’t meet the filing deadline, 
HMRC late filing penalties for Corporate Tax

HMRC late filing penalties for Corporate Tax

From day 1 a late filing fee of £100 will apply and this will gradually increase. It is really important to submit your filing on time as it could have a negative impact on your company’s reputation and any future contact with HMRC. Here are the late filing penalties: 

How late? Penalty fee
1 day £100
3 months an additional £100 
6 months 10% of the unpaid amount 
12 months An additional 10% of any unpaid tax

If you miss your payment 3 times in a row then the £100 penalties will increase to £500. 

How does HMRC deal with late filing and payment?

How does HMRC deal with late filing and payment?

If your deadline has passed, contact HMRC as soon as possible so that you can update them on your situation. If you do not then HMRC may take legal action against your company, which will incur additional fees. Contacting HMRC can be scary but it will help your situation and enable HMRC to determine the next best possible course of action. If, having assessed your situation, they feel that you could pay your Corporation Tax with extra time then you may be able to use the Time to Pay arrangement.

What is a Time to Pay arrangement?

What is a Time to Pay arrangement?

To help businesses deal with the impact of the Covid-19 pandemic HMRC introduced a number of lifelines, including the Time to Pay Arrangement (TTP). This arrangement was introduced to help businesses like yours arrange a new and more realistic payment deadline. In order to qualify businesses must show HMRC their financial accounts, attempts to find the funds to pay and provide an estimate on when they will be able to pay. Time to Pay could be available for other tax liabilities, not just Corporation Tax, so make sure you review your tax situation carefully. If you qualify for TTP then your repayment deadline could be extended by up to 12 months, but it is determined case-by-case. 

Can you appeal against a late filing penalty?

Can you appeal against a late filing penalty?

if your tax filing is more than 6 months late then HMRC will send you a ‘tax determination’ letter. This will outline how much Corporation Tax they think you owe and you cannot appeal it. 

If you have a reasonable excuse, then you can appeal by writing to your Corporation Tax Office or by calling the Corporation Tax helpline

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Tax is our specialty and we understand the stress that can come with it. It is really important to file your tax return on time and correctly, but we know that mistakes happen sometimes. If you need our support then just get in contact, we can help.  

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