Commentary

A4.557 Late filing penalties—company tax returns

Administration and compliance

A4.557 Late filing penalties—company tax returns

A4.557 Late filing penalties—company tax returns

For company tax returns, the late filing penalty provisions in FA 1998, Sch 18, Pt I et seq, summarised below remain in force and have not been superseded by the harmonised penalty regime.

Fixed penalty

There is an automatic fixed penalty of £100 if a company tax return is not delivered by the filing date (see D1.1308), which is increased to £200 if the return is not delivered within three months after the filing date1.

These penalties are increased to £500 and £1,000 respectively where the company:

  1.  

    (a)     has been within the charge to corporation tax for each of the two preceding accounting periods

  2.  

    (b)     has been required to deliver a return for each of those periods, and

  3.  

    (c)     a fixed penalty has been imposed for each of those periods2

Tax-geared penalty

A company becomes liable to a tax-geared penalty if it fails to file its return either within 18 months of the relevant accounting period or, if the fling date is later than that, by the filing date. The penalty is 10% of the unpaid tax for the accounting period if the return is filed within two years after the end of that period. Thereafter the penalty increases to 20% of the unpaid tax. 'Unpaid tax' is defined as the amount of corporation tax which remains unpaid on the date when liability for the penalty arose3.

Example

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