March 8, 2023
In the United Kingdom, companies can face penalties from HM Revenue and Customs (HMRC) for various tax-related offences, such as failing to file tax returns or pay taxes on time. The specific penalty amount will depend on the nature of the offence and the company’s history of compliance with tax laws.
Here are some examples of penalties that a company may face from HMRC:
Late filing penalties: If a company fails to file its tax returns on time, it may be subject to a penalty. The penalty will usually be based on the length of the delay. It can range from a few hundred pounds for small companies to several thousand pounds for larger companies.
The penalty only applies to accounts. The level of the penalty depends on how late the accounts reach Companies House.
Length of period (measured from the date the accounts are due)
Penalty for a private company or LLP
Penalty for a public company
Not more than 1 month
More than 1 month but not more than 3 months
More than 3 months but not more than 6 months
More than 6 months
Late payment penalties: If a company fails to pay its taxes on time, it may be subject to a penalty. The penalty will usually be based on the length of the delay and the amount of tax owed.
Days after payment due date
Action by customer
Payments made or TTP is proposed by day 15 and then agreed
No penalty is payable
Payments made or TTP is proposed by day 30 and then agreed
Penalty will be calculated at half the full percentage rate (2%)
Some tax is still unpaid, no TTP agreed
Penalty will be calculated at the full percentage rate (4%)
Interest charges: If a company owes taxes and does not pay them on time, it may be charged interest on the unpaid amount. The current rate of interest charged is 2.5% plus the Bank of England base rate.
Penalties for failing to register for VAT: If a company is required to register for value-added tax (VAT) but fails to do so, it may be subject to a penalty. The penalty is usually based on the length of the delay and the amount of VAT owed.
If you registered
Then the penalty rate will be
not more than 9 months late
more than 9 months but not more than 18 months late
more than 18 months late.
In addition to financial penalties, companies may face other consequences for tax-related offences, such as criminal prosecution or disqualification of company directors. Companies need to comply with all
tax laws and regulations to avoid these penalties and consequences.
Suppose you require any clarification on any of the above matters. Please speak with one of our team who can give you tailored advice to suit your business circumstances.
The information in the above tables is accurate as of the date of publication. Sources of information can be found on the GOV website.
Looking for tailored advice? Contact the team in Liverpool today to see how we can help take your business to the next level.
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