Wenzo guidesWhy are there two penalties?
A limited company files two things each year. The annual accounts go to Companies House, and the Company Tax Return (CT600) goes to HMRC. Each has its own late filing penalty.
Our guide to accounts and tax returns explained shows how the two fit together.
What does Companies House charge for late accounts?
A private company usually has 9 months from the end of its accounting reference period to deliver its accounts. First accounts covering more than 12 months are due 21 months after incorporation, or 3 months after the accounting reference date if that is later.
The penalty is automatic and is sent to the registered office. GOV.UK sets out the penalties for late accounts:
| How late the accounts are | Penalty |
|---|---|
| Up to 1 month | £150 |
| 1 to 3 months | £375 |
| 3 to 6 months | £750 |
| More than 6 months | £1,500 |
The penalty is doubled if accounts are late 2 years in a row. For example, GOV.UK describes a private company with a period ending 30 September 2019 that had to deliver its accounts by 30 June 2020. Delivered on 15 July 2020, they attracted a £150 penalty.
A deadline that falls on a Sunday or bank holiday still applies. Accounts sent back for correction, for example for an unsigned balance sheet, and then filed late still get a penalty.
Running late with your accounts?
We don’t handle penalty appeals, but we can get your accounts and Company Tax Return ready, aiming for drafts within 24 hours of complete records. From £199, bookkeeping included, paid when you approve.
Find your companyCan I get more time?
If something exceptional happens before the deadline, you can apply to Companies House for more time. You can only do this before the deadline has passed.
What does HMRC charge for a late CT600?
HMRC’s Company Tax Return penalties start at £200 the day after the deadline, with another £200 at 3 months. At 6 months HMRC estimates the bill and charges 10% of the unpaid tax, and at 12 months another 10% of any unpaid tax. If the return is late 3 times in a row, the £200 penalties become £1,000 each.
Once a return is 6 months late, HMRC can send a ‘tax determination’ of the Corporation Tax it thinks you owe. You cannot appeal a determination: you pay the tax and file the return, and HMRC recalculates interest and penalties.
Our CT600 deadline guide explains when the return and the tax are due.
How do I appeal a Companies House penalty?
An appeal needs a specific reason, with dates and details, showing the circumstances were out of your control. Companies House’s late filing penalties guidance says the registrar’s discretion is very limited, for example an unforeseen event at a critical time, such as a fire destroying records a few days before the deadline. It will not collect the penalty while it considers your appeal.
An appeal is unlikely to succeed if it rests only on reasons such as:
- these were the company’s first accounts, or the company is dormant
- you cannot afford to pay, or the company or directors are in financial difficulty
- you relied on your accountant, or your accountant was ill
- another director was responsible for the accounts
- you did not know when or how to file
- the accounts were delayed or lost in the post
- the directors live or were travelling overseas
What if the appeal is turned down?
If you have more information, you can take it further, in this order:
- The Senior Casework Unit of the Late Filing Penalties Department.
- The independent adjudicators.
- A final application to the Registrar.
If you cannot pay at once, Companies House will normally accept monthly instalments if you ask and explain why. Unpaid penalties go to debt collectors and can end up in court.
How do I appeal an HMRC penalty?
You can appeal a CT600 late filing penalty online if you have a reasonable excuse. You usually have 30 days from the date of the penalty to appeal.
- File the return first.
- Have the company’s UTR, the date on the penalty notice, the penalty amount and the accounting period end date ready.
- Complete the online form in one go.
- Print it and post it to the address on it.
If HMRC keeps the penalty, you can ask for a review or appeal to the tax tribunal.
What counts as a reasonable excuse?
GOV.UK’s guide to reasonable excuses gives examples such as a close relative dying shortly before the deadline, an unexpected hospital stay, a serious illness, a computer or software failure while preparing the return, problems with HMRC online services, or a fire, flood or theft.
It says these will not count: a payment that failed for lack of funds, finding HMRC’s online system too difficult, not getting a reminder, or a mistake on the return.
What should I do if I am already late?
Both sets of penalties grow the longer the filing is missing, so the cheapest step is usually to get the accounts and CT600 filed.
Our prices are £19 for dormant company accounts, paid at the start, and £199 (turnover up to £90,000) or £499 (turnover above £90,000) for a trading company’s accounts and Corporation Tax return, with bookkeeping included and paid when you approve. You approve everything before it is filed.
Penalties already charged for late periods stay with the company. Penalty appeals are not part of the standard packages, and any extra work outside them is priced and agreed with you first.
You can check your dates with the deadline checker, read know your deadlines, see all three prices, or call us on 020 7123 9335.
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