If a return is not delivered by the filing date, an automatic fixed penalty of £100 applies.
A further £100 is charged if the return is not filed within three months of the filing date. These penalties are increased to an initial £500 and a further £500 respectively if the company has been within the charge to CT and has filed a return late for three accounting periods in a row.
A failure to file a return by the later of 18 months after the end of the accounting period or the company’s filing deadline attracts a tax based penalty of 10% of the unpaid tax (20% if the return is not delivered within two years of the end of the accounting period or filing deadline).
Penalties also arise when a company fails to supply documents or to keep and preserve records or fails to notify chargeability.
In rules set out in the Finance Act 2009, large companies are required to notify HMRC of the identity of their senior accounting officer, who must certify annually that the accounting systems are adequate for the purposes of accurate tax reporting. These obligations will be supported by penalties (£5,000) chargeable on the officer personally and the company for careless or deliberate failure of these obligations. The rules are to apply to accounting periods beginning on or after 21 July 2009.
We have created several posts surrounding Tax Penalties for further reading here.
For more information, we provide a Business Consultation to ensure our clients benefits from tax planning and accounting matters.