Penalties for Not Meeting HMRC’s Reporting Standards

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.

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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	£150	£750
More than 1 month but not more than 3 months	£375	£1,500
More than 3 months but not more than 6 months	£750	£3,000
More than 6 months	£1,500	£7,500

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	Penalty
0-15	Payments made or TTP is proposed by day 15 and then agreed	No penalty is payable
16-30	Payments made or TTP is proposed by day 30 and then agreed	Penalty will be calculated at half the full percentage rate (2%)
Day 30	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	5%
more than 9 months but not more than 18 months late	10%
more than 18 months late.	15%

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 & consequences.

We’re here to help you get to grips with management accounts and help you make good decisions for your business so naturally, if you’re looking for advice on filing HMRC Returns, HMRC Penalties or even if you just want to put good produres in place right now then we’re here to help.

Please speak to our team on 0151 662 0508 who can give you tailored advice to suit your own unique 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.