What is the penalty for the late filing of a Company Tax Return? Catherine Heinen FCCA of TaxAssist Accountants explains the filing rules for Company Tax Returns and the penalties for late submission.

What is included in a Company Tax Return?

A Company Tax Return must be completed by all UK resident companies and HM Revenue and Customs (HMRC) will issue a notice to complete a return. This includes members’ clubs, associations, societies and other unincorporated bodies.

A Company Tax Return includes:

Company Tax Return form

This form, also known as a CT600, includes information about the company and the return, as well as the figures that contribute to the tax calculation. For example, turnover, trading and net profits, bank interest and dividends received and other non-trading income, chargeable gains and deductions and reliefs.

Supplementary pages

Supplementary pages are additional pages including information that do not form part of the main Company Tax Return form. They can include loans to participators for close companies, ring fence trades and disclosure of tax avoidance schemes.

Accounts

The accounts that relate to the period of the Company Tax Return should be attached to the submission.

If the company is dormant or in liquidation you won’t need to attach the company’s accounts.

Computations

Computations show how the figures on the company tax return have been calculated using the figures in the company’s accounts.

The accounts and computations should be submitted alongside your tax return in a single document in Inline eXtensible Business Reporting Language (iXBRL) format. The HMRC online filing service will automatically convert accounts to the required format if you’re able to use this.

Other relevant information

Anything else relevant should also be attached to the return.

Declaration

The return must include a declaration by the person making the return that is correct and complete to the best of their knowledge and belief.

When do you need to send a Company Tax Return?

The deadline for sending a Company Tax Return is 12 months after the end of the accounting reporting period (year-end).

If HMRC has issued you with a notice to deliver a Company Tax Return, you must ensure you deliver a tax return to them by the deadline.

Company Tax Returns must be filed electronically. You can file the company’s tax return online through an accountant or the GOV.UK website.

Corporation Tax is payable nine months and one day after the end of the accounts reporting period. You will likely need to know the amount of tax to pay so it may be more practical to submit your Company Tax Return at this stage.

What are company tax late filing penalties?

If you file your Company Tax Return late, HMRC will apply penalties. It is important to ensure you leave enough time for the company accounts and tax return to be prepared to make sure the information submitted is correct.

The penalties for late filing are as follows:

Time after your deadline	Penalty
1 day	£100
3 months	Another £100
6 months	HMRC will estimate your Corporation Tax bill and add a penalty of 10% the unpaid tax
12 months	Another 10% of any unpaid tax

If you file your Company Tax Return late for a third time, the penalties are higher, with the £100 penalties increasing to £500 each.

You must pay penalties within 30 days of notice, after which HMRC will charge additional interest on the penalty.

If you file your Company Tax Return more than six months late, HMRC will send you a letter. The letter will state the amount of Corporation Tax to pay, a ‘tax determination’. You cannot dispute it, you must either pay the tax determined or file a tax return and pay the calculated amount.

It’s important to act as soon as possible to mitigate further penalties and interest on late filing of the tax return.

Where a taxpayer fails to meet their obligation to submit a tax return, HMRC has the power to raise a ‘Revenue Determination’ of the liability due and unpaid. HMRC will then pursue this tax debt, so it is important to ensure you keep your affairs up to date.

What is a Time to Pay (TTP) Arrangement?

If you are unable to pay the Corporation Tax bill by the deadline it’s important to have a conversation with HMRC or your accountant as soon as possible to minimise penalties and interest and get a plan in place.

HMRC may allow you to set up a Time to Pay arrangement so you can pay the liability in affordable instalments. There is no standard Time to Pay arrangement, HMRC will work with the company to arrange this based on the circumstances of the company’s finances.

The arrangement can cover any interest and penalties as well as the tax liability itself, interest will accrue from the tax liability due date until the end of the TTP arrangement. The arrangement can also be amended over time as circumstances change.

About the author

Catherine Heinen FCCA is Technical Content Writer at TaxAssist Accountants and is a qualified Certified Chartered Accountant (FCCA). She has worked at two accountancy practices in the UK top 50 accountancy firms according to Accountancy Age, Catherine has significant experience in accounts, tax returns and advising clients.

See also

Make sure you are compliant by displaying the HSE Law Poster

Understanding the new HMRC late submission penalty scheme for VAT and ITSA payments

How to get government grants for your business

Find out more

Corporation Tax for Company Tax Return (CT600 (2023) Version 3) (GOV.UK)

File your accounts and Company Tax Return (GOV.UK)

How to pay a debt to HMRC with a Time to Pay arrangement (GOV.UK)

Images

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Publication date

7 December 2023

Any opinion expressed in this article is that of the author and the author alone, and does not necessarily represent that of The Gazette.