Filing a Corporation Tax return late has always meant a fine, but from April 2026 it is noticeably more expensive. HMRC has increased late‑filing penalties for the first time in 30 years, and the change affects all limited companies. It applies regardless of company size, whether the business made a profit, or even if it did not trade at all. If a return is submitted late, a penalty will apply.
The change was announced in the November 2025 Budget, after the government acknowledged that current penalties, which were set back in 1998, had lost their impact over time due to inflation. As a result, HMRC is increasing fixed penalties to bring them back in line with their original value.
From 1 April 2026, the automatic penalty for filing a Company Tax Return late increased from £100 to £200. If the return is still outstanding after three months, the total penalty will now rise to £400. Where a company files late for three accounting periods in a row, the penalties increase further, reaching £1,000 or £2,000 if those repeated returns are more than three months overdue. These penalties apply automatically and are charged even if no Corporation Tax is due.
While the Corporation Tax return is usually due twelve months after the end of the accounting period, the tax itself is normally due earlier, nine months and one day after the year end. Missing the payment deadline leads to interest charges, while missing the filing deadline leads to fixed penalties. With fines now increasing, a simple admin oversight can quickly turn into an avoidable cost.
This tightening of penalties reflects HMRC’s wider approach to compliance. As systems become more digital, there is less flexibility and fewer reminders. Returns are either filed on time or they are not, and penalties are applied automatically. This makes planning ahead particularly important for owner‑managed businesses, companies with unusual year ends, or businesses that have recently changed accountants.
Emma Fisher, Senior Corporate Tax Manager, explains: “Deadlines around Corporation Tax filings are strict, and HMRC penalties are automatic. Even where no tax is due, failing to submit the return on time can quickly create an unnecessary and avoidable cost for the business. This is especially relevant for dormant companies, which are often caught out by assumed exemptions. Unless HMRC has formally agreed that no return is required, a CT600 is still expected.
“We are seeing many charities receive a statutory notice to file a tax return and wrongly assume they can ignore it because they are a charity. This is incorrect. If HMRC issues a notice to deliver a tax return, the return must be submitted, even if the charity has no tax liability.”
The message is straightforward. Although the penalties are increasing, they are entirely avoidable. Knowing your accounting dates, understanding when HMRC expects a return, and allowing enough time for accounts to be prepared all help reduce the risk.
For companies that have filed late in the past, submitting one return on time resets the repeat‑offender position and reduces future penalties. Treating Corporation Tax compliance as a priority, rather than something to deal with last minute, is a straightforward way to protect cashflow and avoid unnecessary costs.
To find out more, please contact your local B&B office at www.burgisbullock.com
Emma Fisher, Senior Corporate Tax Manager at Burgis & Bullock
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