How much have Corporation Tax penalties increased?

If you run a limited company, there’s an important change to be aware of when it comes to filing your Corporation Tax return.

From 1 April 2026, HMRC increased the penalties for late filing of Corporation Tax returns.

With the increased penalties now in force, making sure your return is filed on time is more important than ever.

What’s changed?

The standard penalties for late Corporation Tax returns have increased:

• Up to 3 months late: £200

• More than 3 months late: £400

• Three or more consecutive late returns: penalties can increase to £1,000

• Three or more consecutive late returns and more than 3 months overdue: potentially £2,000

In other words, the cost of missing your filing deadline has increased significantly.

Why have the penalties gone up?

The previous penalties had been in place since 1998 and, with inflation, their real value had fallen considerably. Their value has been restored to provide a stronger incentive for companies to file their returns on time.

Repeated late filing could be particularly costly

For companies that regularly miss their Corporation Tax filing deadline, the consequences can be more significant.

Higher penalties can apply where a company has filed late for three or more consecutive accounting periods and has received a penalty for each of the first two periods.

With the new penalty rates, repeated late filing could therefore become an increasingly expensive problem.

Remember: filing and paying are different deadlines

The Corporation Tax return filing deadline is normally 12 months after the end of the company’s accounting period.

This is different from the deadline for paying your Corporation Tax. For most companies with taxable profits of £1.5 million or less, Corporation Tax is due 9 months and 1 day after the end of the accounting period.

So, make sure you have both deadlines in your diary.

Who does this affect?

These changes apply to companies required to file a Corporation Tax return.

They do not apply to individuals or sole traders filing under Self Assessment.

If you operate your business through a limited company, Corporation Tax filing deadlines are an important part of your annual compliance timetable.

Don’t be late

The good news is that avoiding these penalties is simple.

Let us have your books, records and information in plenty of time, so we can prepare and file your return by the deadline.

We appreciate that keeping track of tax deadlines isn't always at the top of your list when you're busy running a business. That's where we can help.

If you’re unsure when your Corporation Tax return is due, or would like to discuss how we can help with your company’s accounts and tax compliance, please get in touch.