The Corporation Tax penalty for late filing has doubled. Here’s what that means for your business.
For limited companies filing late, it’s about to cost more. From 1st April 2026, HMRC doubled the flat penalty for late Corporation Tax filing, from £100 to £200, marking the first real change to these penalties in 25 years.
According to the official policy outlined by HMRC, the reasons for this increase included:
- Counteracting nearly 30 years of inflation, as the previous £100 corporation tax penalty was established in 1998.
- Restoring the original goal of deterrence and reducing the likelihood of organisations filing late and treating the fine as a minor, manageable cost.
The idea is to incentivise businesses and their corporate officers to file their returns on schedule and even escalating fines more aggressively to avoid habitual late filings.
How do the new filing penalties work for businesses?
Following this change, if a business misses the filing deadline, it results in a charge of £200 straight away.
Then, if the filing is still late three months on, and that rises to £400, with persistent late filers, three late filings in a row, facing penalties of up to £2,000.
On their own, none of these figures will sink a business, but they add up fast if filing keeps slipping, and they’re a clear signal that HMRC is tightening up across the board, not just on Corporation Tax.
Get up to date with your filing now with the help of a trusted accountant. Contact us today to get ahead.
Why was this change to Corporation Tax penalty introduced in 2026?
HMRC’s own figures show small businesses account for a large share of the UK’s tax gap, much of it linked to Corporation Tax. These penalty increases sit alongside a wider push to close that gap, and businesses should expect this kind of tightening to continue rather than reverse.
What do you need to do?
If your filing has been running close to the deadline in previous years, this is a good moment to build in more buffer, not less.
A missed deadline that used to cost £100 now costs double, and repeat lateness costs considerably more thanks to the new corporation tax penalty. If you’re not sure when your filing deadline actually falls or want a system that keeps you ahead of these deadlines, that’s worth getting organised now.
Make sure your Corporation Tax filing never becomes a penalty problem. Get in touch with our trusted team of accountants, and we’ll make sure it’s handled properly.
Contact us on 0800 999 1800, or send us an enquiry via the website.
