Should your business be liable for Corporation Tax and you don’t meet HMRC deadlines and requirements then you may face a penalty.

 

If you’ve made an error, done something you shouldn’t have or not done something you should have, you must correct it immediately. If you do, you may not be charged a penalty or the penalty charged may be less.

 

Similarly, if your business fails to meet its responsibilities for other taxes and duties, further penalties may also arise.

 

Penalties for not telling HMRC your company is liable for Corporation Tax

 

1) Non-deliberate - 30% of the potential lost revenue

2) Deliberate but not concealed - 70% of the potential lost revenue

3) Deliberate and concealed - 100% of the potential lost revenue

 

Late Company Tax Return to HMRC

 

1) 1 day late - £100

2) 3 months late - another £100

3) 6 months late - HMRC will estimate your company’s tax bill and add a penalty of 10% the unpaid tax

4) 12 months late - Another 10% of any unpaid tax

 

If your returns are late 3 times in a row, the £100 penalties are increased to £500 each.  If your return’s more than 6 months late HMRC will write telling you how much Corporation Tax they think you must pay. This is called a ‘tax determination’ and you can’t appeal against it.

 

Penalties for not submitting your Annual Accounts to Companies House

 

1) Up to 1 month late - £150

2) 1 to 3 months late - £375

3) 3 to 6 months late - £750

4) More than 6 months late - £1,500

 

The penalty is doubled if your accounts are late 2 years in a row.  You can be fined up to £5,000 and your company struck off the register if you don’t send Companies House your accounts or Annual Return on time.