Late Filing Penalties for Limited Companies

Keeping on top of your paperwork with HMRC can be a real headache,  you need to ensure you keep track of filing deadlines for your business otherwise the fines from HMRC and Companies House can put quite a dent in your pocket.

Confirmation statements (formerly called Annual Returns), Annual Accounts, Corporation Tax Returns and VAT returns if you’re VAT registered are the basic filings all limited companies are required to file throughout each financial year. If you fail to do so, you can incur penalties!

Confirmation Statements (Annual Returns)

Confirmation Statements are required to be filed at least once every 12 months with the deadline most commonly being one calendar year after the date of incorporation or the date of the last filed annual return/confirmation statement. You are able to file up to 14 days after the due date but you can be fined up to £5,000 and the company struck off if you fail to file.

Annual Accounts

Annual Accounts are required to be filed for each financial year with the deadline for filing being 9 months after the company year end. Penalties will occur if filed after the deadline:

Up to 1 month £150
1-3 months £375
3-6 Months £750
More than 6 months £1500

It should also be noted that penalties are doubled if late 2 years in a row and that you could be fined and the company struck off if these are not filed.

(Penalties for public limited companies are different)

Corporation Tax

Corporation tax returns are to also be filed for each accounting period (commonly the same 12 months of the company financial year). The deadline for paying the corporation tax due is 9 months and 1 day after the accounting period ends and the deadline for filing the corporation tax return is 12 months after.

The penalties for late filing are:

1 day £100
3 months Another £100
6 months HMRC will estimate your tax bill and a penalty equal to 10% of the unpaid tax will be applied
More than 6 months Another penalty equal to 10% of unpaid tax

If the tax return is late 3 times in a row, the £100 penalties will increase to £500

VAT Returns

If you are registered for VAT, the deadline for filing is 1 month and 7 days after the accounting period deadline (this will vary depending on which scheme you are registered on). If you fail to file and/or pay by the deadline, HMRC will record a default and you may enter into a 12 month surcharge period. If you happen to default again within the period, it will be extended by a further 12 months.

The surcharges payable for businesses with turnover less than £150,000 are:

2nd default in 12 months No surcharge
3rd default in 12 months 2% (no surcharge if less than £400)
4th default within 12 months 5% (no surcharge if this is less than £400)
5th default within 12 months 10% or £30 (whichever is more)
6 or more within 12 months 15% or £30 (whichever is more)

The surcharges payable for businesses with turnover greater than £150,000 are:

2nd default in 12 months 2% (no surcharge if this is less than £400)
3rd default in 12 months 5% (no surcharge if this is less than £400)
4th default within 12 months 10% or £30 (whichever is more)
5th default within 12 months 15% or £30 (whichever is more)
6 or more within 12 months 15% or £30 (whichever is more)

There will be no surcharge if you happen to submit a late VAT Return but you have still paid the amount in full by the due date, you have no tax to pay or you are due a VAT repayment.

HMRC will also charge penalties in certain circumstances. 

  • If you file a return that contains a careless or deliberate inaccuracy. The penalty will be 100% of the under-stated or over-claimed amount
  • If HMRC sends you a VAT assessment that’s too low and you don’t inform them witin 30 days, the penalty will be 30% of the assessment
  • If you submit a paper VAT return, HMRC will charge a £400 penalty unless you have been informed by them that you are exempt.

We Are Here To Help

If you would like guidance or assistance to fulfill these filing obligations, please do contact us.

 

Jody Miles
Qualified Chartered Management Accountant with more than 10 years practice experience. Very different from the stereotypical accountant but professional and diligent none the less. In my spare time I enjoy spending time with my young family and volunteering on the Calshot RNLI Lifeboat.

Leave a Reply