If you’re a freelancer, contractor or small business working as a sole trader or limited company in the UK, it’s vital you stay on top of the deadlines for your tax filings, as well as the various tax rates and thresholds.

If you miss filing or payment deadlines imposed by HMRC or Companies House you will face various on-the-spot penalties or tiered fines based on the degree of lateness.

HMRC

Self Assessment

HMRC issue two types of Self Assessment penalties – those for late filing, and for late payment of owed tax. Both increase over time.

Late filing

Missed deadline £100 penalty
3 months late £10 daily penalty for up to 90 days
6 months late 5% of tax due or £300 (whichever is greater)
12 months late 5% of tax due or £300 (whichever is greater)

 

Additional penalties may be applied if HMRC believe the taxpayer is intentionally withholding information or trying to evade tax.

Late payment

30 days late 5% of tax due
6 months late 5% of tax due at that date
12 months 5% of tax due at that date

 

VAT

For VAT registered businesses HMRC issue increasingly strict penalties if you miss multiple returns.

Missed payments within 12 months Penalty if annual turnover is less than £150,000 Penalty if annual turnover is £150,000 or more
1 None None
2 None 2% (None if less than £400)
3 2% (None if less than £400) 5% (None if less than £400)
4 5% (None if less than £400) 10% or £30 (whichever is greater)
5 10% or £30 (whichever is greater) 15% or £30 (whichever is greater)
6 or more 15% or £30 (whichever is greater) 15% or £30 (whichever is greater)

 

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Corporation Tax

As with Self Assessments, Corporation Tax penalties are issued both for late filing and late payment, and increase over time.

Late filing

1 day late £100 penalty
3 months late £100 penalty
6 months 10% penalty added to estimated tax bill
12 months 10% penalty added to estimated tax bill

 

Late payment

Any overdue payment 3% penalty

 

Construction Industry Scheme

If you are a contractor working under the CIS, you will face additional penalties if you miss the date for your CIS return.

1 day late £100 penalty
2 months late £200 penalty
6 months late £300 penalty or 5% of CIS deductions (whichever is greater)
12 months late £300 penalty or 5% of CIS deductions (whichever is greater)

 

Companies House

Statutory Accounts

Limited Company Public Limited Company
Up to 1 month £150 £750
Up to 3 months £375 £1,500
Up to 6 months £750 £3,000
More than 6 months £1,500 £7,500

 

Penalties double if returns are late in two successive financial years.

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