Budget Highlight 5: Increases to Corporation Tax late filing penalties
The penalties will double for companies submitting a Corporation Tax return late from 1st April 2026. This will be legislated for in Finance Bill 2025-26.
Late filing penalties were first implemented in 1998 to promote timely submission of corporation tax returns. However, inflation has reduced their real value over time, weakening their original deterrent effect. From 1 April 2026, these penalties will be doubled as follows:
| Current Rate | New Rate | |
| Return late | £100 | £200 |
| Return is more than 3 months late | £200 | £400 |
| Three successive failures, return late | £500 | £1,000 |
| Three successive failures, return is more than 3 months late | £1,000 | £2,000 |
