What gets me fined?
One thing starts the fine: sending your company tax return in late. Every company has a deadline to send this return to HMRC each year. Miss it, and a penalty lands the day after. You get fined for being late even if your company made no money and owes no tax.
The fine is not a one-off. The longer the return stays unsent, the more it grows. So the cheapest move is always to get the return in, even a late one beats a later one.
How much is the penalty?
The fine builds up in steps as time passes. Here is what you owe at each point:
| How late your return is | What you pay |
|---|---|
| The day it is late | £200 |
| Still not in after 3 months | Another £200 (so £400 in total) |
| Still not in after 6 months | HMRC guesses your tax bill and adds 10% of the tax you owe |
| Still not in after 12 months | Another 10% of the tax you owe |
So the first two steps are flat £200 fines no matter what. The 6 and 12-month steps are based on the tax you owe, so they bite hardest if your company made a real profit.
There is one extra sting. If your return is late 3 years running, those two £200 fines jump to £1,000 each. Filing on time next year resets it.
A real example, in pounds
Say your return was due and you forgot all about it. Your company owes £5,000 in Corporation Tax for the year. Here is how the fine grows if you keep putting it off:
- Day 1 late: £200 fine.
- 3 months late: another £200, so £400 in fines.
- 6 months late: HMRC adds 10% of your £5,000 tax bill, that is £500. You are now at £900 in fines, on top of the £5,000 tax.
- 12 months late: another 10%, another £500. Total fines: £1,400, plus the £5,000 tax you still owe.
File it on day one instead and you pay a single £200 fine. The gap between £200 and £1,400 is just how long you waited.
Can I appeal a penalty?
Yes, if you had a genuine reason you could not file in time. HMRC calls this a reasonable excuse, and you normally have 30 days from the date on the fine to put your case to them. You can do it online or by post.
One catch worth knowing: you have to actually send the late return first, then appeal the fine. You cannot appeal while the return is still missing.
What counts as a good reason?
A reasonable excuse is something real that stopped you, not just forgetting. HMRC usually accepts things like:
- A serious illness or an unexpected stay in hospital that left you unable to deal with it.
- A death of someone close, around the time of the deadline.
- An HMRC or software problem that stopped you filing when you tried.
What HMRC does not accept: that you did not have the money to pay, or that you found their online system too hard to use. "I forgot" on its own will not work either. The reason has to be something that genuinely got in your way.
One more thing HMRC looks for: once the reason is behind you, you sent the return as soon as you could. If your excuse cleared up and you still left it for months, that weakens your case.
When you appeal, you write down what happened and when, so HMRC can see why you could not file on time. If they agree, the fine is cancelled.
Is this the same as the Companies House fine?
No, and this trips a lot of people up. There are two separate filings each year, going to two different places: your tax return goes to HMRC, and your accounts go to Companies House. Each one has its own late fine.
This guide is about the HMRC fine for a late tax return. Companies House has its own separate fine for filing your accounts late, with its own amounts. Miss both deadlines and you can be fined twice, once by each.
How SimpleReturns keeps the fine away
The simplest way to never pay a penalty is to never miss the deadline. We work out your figures, prepare your return, and get it filed in good time, so the £200 clock never starts. Connect your bank or upload a statement and we handle the rest.