Corporation tax penalties for late returns and inaccuracies

Late filing penalties for returns due on or after 1 April 2026

1 day late

£200 (GOV.UK: penalties for late filing)

3 months late

Another £200 (GOV.UK)

6 months late

HMRC estimates the tax and adds a penalty of 10% of the unpaid tax (GOV.UK)

12 months late

Another 10% of any unpaid tax (GOV.UK)

Late 3 times in a row

Each £200 penalty becomes £1,000 (GOV.UK)

The 2026 increase

Where the increase comes from

HMRC's policy paper of 26 November 2025 sets out the new amounts under Schedule 18 to the Finance Act 1998, for returns with a filing date on or after 1 April 2026. The paper does not change the 10% tax-based penalties.

For example, a return for the year to 31 March 2026 is due on 31 March 2027, so the new amounts apply. Filed on 15 May 2027 it costs £200. Filed on 10 July 2027, more than 3 months late, it costs £400. A return for the year to 31 December 2024, due 31 December 2025, falls under the old amounts (GOV.UK: Company Tax Returns; policy paper).

Tax-based penalties and determinations

Once a return is 6 months late, HMRC issues a tax determination estimating the corporation tax due and adds a 10% penalty on the unpaid tax. A determination cannot be appealed. It is replaced by filing the return (GOV.UK: penalties for late filing).

Penalties on a client's run of returns

The repeated lateness rule looks at the company's record across returns. GOV.UK says that if a return is late 3 times in a row, the £200 penalties rise to £1,000 each. A company that has filed its two previous returns late therefore faces £1,000 on the third even if it is only a day late, and £2,000 if it is more than 3 months late (policy paper).

The fixed penalties are charged even when the company owes no tax. The 10% tax-based penalties depend on the tax unpaid at 6 and 12 months, so paying the tax on time keeps them at nil even when the return is late (GOV.UK: penalties for late filing).

Appealing a late filing penalty

1. File the return

   The return must be filed before an appeal can be made (GOV.UK).

2. Check for a reasonable excuse

   Only a reasonable excuse supports an appeal (GOV.UK).

3. Appeal online

   Give the company's UTR, the date of the penalty notice, the amount, the end date of the accounting period and why the deadline was missed (GOV.UK).

Inaccuracy penalties

How inaccuracy penalties work

The percentages in HMRC factsheet CC/FS7a, last updated 21 July 2026, apply to the potential lost revenue, the extra tax due because of the inaccuracy. A disclosure is unprompted when it is made before the company has reason to believe HMRC has discovered or is about to discover the inaccuracy.

Within each range the penalty is reduced for the quality of the disclosure: up to 30% for telling HMRC, up to 40% for helping and up to 30% for giving access to records. Where disclosure comes about 3 years or more after the inaccuracy, the reduction is normally limited to 10 percentage points above the minimum (CC/FS7a).

A careless penalty can be suspended for up to 2 years if HMRC sets conditions it believes the company can meet (CC/FS7a).

Questions