HMRC Penalties for Corporation Tax: Late Filing, Late Payment & Errors
Missing your Corporation Tax deadlines can be expensive. HMRC charges penalties for late filing, late payment, and inaccurate returns — and they add up fast.
Late Filing Penalties
Your CT600 must be filed within 12 months of your accounting period end. Miss this deadline and penalties stack:
| How Late | Penalty |
|---|---|
| 1 day late | £100 |
| 3 months late | Another £100 (total £200) |
| 6 months late | HMRC estimates your tax + charges 10% of unpaid tax |
| 12 months late | Another 10% of unpaid tax |
If you file late 3 times in a row (three consecutive periods), the £100 penalties increase to £500 each.
Example: 6 Months Late
Your company owes £10,000 Corporation Tax. You file 7 months late:
| Penalty | Amount |
|---|---|
| 1 day late | £100 |
| 3 months late | £100 |
| 6 months late (10% of £10,000) | £1,000 |
| Total penalties | £1,200 |
That's on top of the £10,000 tax you already owe, plus interest.
Late Payment Interest
Corporation Tax is due 9 months and 1 day after your accounting period ends. If you pay late, HMRC charges interest from the due date until you pay.
The current late payment interest rate is 7.25% (as of 2025). This is not a penalty — it's automatic interest that accrues daily.
Example
You owe £5,000 CT. Your period ended 31 March 2025, so payment was due 1 January 2026. You pay on 1 April 2026 (3 months late):
Interest = £5,000 × 7.25% × (90/365) = £89.38
Inaccuracy Penalties
If your CT600 contains errors that result in you paying too little tax, HMRC can charge penalties based on the behaviour:
| Behaviour | Penalty Range |
|---|---|
| Careless (reasonable care not taken) | 0% – 30% of extra tax due |
| Deliberate (knowingly wrong) | 20% – 70% |
| Deliberate and concealed | 30% – 100% |
Penalties are reduced if you tell HMRC about the error (unprompted disclosure) rather than waiting for them to discover it.
How to Avoid Penalties
- File on time — set a reminder 3 months before the deadline
- Pay on time — set up a direct debit or pay as soon as you know the amount
- Check your figures — use Taxpipe to calculate your tax automatically
- File even if you can't pay — filing avoids the filing penalties, even if you haven't paid yet
- File even if dormant — dormant companies must still file a CT600
Reasonable Excuse
You may avoid penalties if you had a reasonable excuse — but the bar is high:
- ✅ Serious illness or bereavement
- ✅ HMRC's own errors or delays
- ✅ Fire, flood, or other disaster destroying records
- ❌ "My accountant was busy"
- ❌ "I didn't know I had to file"
- ❌ "I thought I was dormant" (dormant companies must still file)
Time to Pay Arrangement
If you can't afford to pay on time, contact HMRC's Business Payment Support Service (0300 200 3835) to set up a Time to Pay arrangement. This won't eliminate interest, but can prevent enforcement action.
Related: trading loss relief on your CT600
Related: dormant company filing guide
Related: CT600 box-by-box guide
Related: how to pay Corporation Tax
Related: what happens in an HMRC enquiry
Don't risk penalties. File your CT600 with Taxpipe — £59, takes 15 minutes, and we calculate everything for you.