HMRC Corporation Tax Penalties – Circumstances & charges

If your company is registered in the UK under Companies House and received ‘notice to deliver a Company Tax Return’ from HM Revenue and Customs (HMRC), it is mandatory to file your returns both with Companies House and HMRC. You have to file returns with HMRC without fail irrespective of the profit or loss made.

When you file your tax return, you work out your,

Profit or loss for Corporation Tax (this is different from the profit or loss shown in your annual accounts)

Corporation Tax bill

The deadline to file your tax return is 12 months after the end of the accounting period. There’s a separate deadline to pay your Corporation Tax bill. It’s usually 9 months and one day after the end of the accounting period.

You’ll have to pay a penalty if you miss the deadline or ignore the HMRC notice. If you have done an error, you should address it and correct it immediately which will help you avoid the penalty or may be subjected to a less penalty.

How much are the HMRC Corporation Tax Penalties?

Penalties for not informing HMRC about your liability for Corporation Tax

You must do this within 12 months of the end of your Corporation Tax accounting period. If you don’t, your company may be charged a penalty. HMRC calls this a ‘failure to notify’ penalty. The penalty is based on the amount of unpaid tax or that your company is liable for.  This is called the potential lost revenue or PLR. They can be classified into the following

If it is a careless or non-deliberate mistake, the maximum penalty payable is 30% of the potential lost revenue

A deliberate mistake can be of two types,

Intentionally sending incorrect information and not trying to hide it, the maximum penalty payable is 70% of the potential lost revenue. This is called Deliberate but not concealed mistake and

Intentionally sending incorrect information and trying to hide it, the maximum penalty payable is 100% of the potential lost revenue. This is a Deliberate but concealed mistake.

However, HMRC may not charge you a penalty if you have a “reasonable excuse” for not informing or notifying them in time.

HMRC publishes various articles on these penalties and steps to avoid them which you can find at


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