What this letter usually means
HMRC send several different letters about corporation tax, and it helps to know which one you are holding. Before a deadline, you may receive a reminder to file your company tax return, known as the CT600, or a reminder to pay. These are prompts, not penalties, and they are a useful nudge.
After a deadline has passed, the tone changes. A penalty notice tells you that a return was filed late, or that tax was paid late, and it sets out the amount due. You may also receive a statement showing interest that has been added because tax was not paid on time. None of these letters mean you are in trouble that cannot be fixed. They are HMRC asking you to act, and the sooner you do, the smaller the cost.
It is worth remembering that your company has two separate obligations that often get confused. One is filing accounts at Companies House. The other is filing the CT600 and paying corporation tax to HMRC. This page covers the HMRC side. The Companies House side has its own deadlines and its own separate penalties.
Who it affects
These rules apply to limited companies and to other organisations that pay corporation tax, such as some clubs and associations. If you run a company that trades, even a small one with a single director, you must file a CT600 for each accounting period and pay any corporation tax due.
A company usually has an accounting period that matches its financial year, often twelve months long. Dormant companies that are not trading may not have tax to pay, but a return can still be required if HMRC have issued a notice to deliver one. If you are unsure whether your company needs to file, it is safer to check than to assume, because the penalty for a missed return starts the moment the deadline passes.
Directors carry the responsibility for making sure the company meets these obligations, so it is the director who needs to act on the letter even if a bookkeeper or accountant normally handles the figures.
What you must not ignore
The single most important point is this. Do not put the letter in a drawer and hope it goes away. Corporation tax penalties escalate with time, so a delay of a few weeks can turn a small charge into a much larger one.
Pay close attention to two separate deadlines, because they fall on different dates. Corporation tax itself is due nine months and one day after the end of your accounting period for companies that are not large. The CT600 return is due later, twelve months after the end of the accounting period. It is very common for people to assume both fall on the same day, and that mistake leads to interest building up quietly even when the return is not yet late.
If you cannot pay the tax in full, do not simply stay silent. HMRC would far rather agree a payment arrangement than chase a debt, and reaching out early protects you. You can read more about settling the bill in our guide on how to pay corporation tax.
What you may need to gather
Before you act, pull together a few things so you can respond accurately. Having these to hand makes the next steps much faster.
- The letter itself, including the reference number and the accounting period it relates to.
- Your company Unique Taxpayer Reference, the ten digit number HMRC use to identify the company.
- The dates of the accounting period in question, so you can check the deadlines.
- Your company accounts for that period, or the figures needed to prepare them.
- Any earlier reminders or penalty notices, which help show whether this is a first lapse or a repeat.
- Details of any tax already paid, with the dates of payment.
If your accounts are not yet finished, getting them completed is usually the first practical job, because the CT600 is built from them. Our page on limited company accounts explains what is involved.
What to do, step by step
Working through this in order keeps things calm and reduces the cost.
- Read the letter carefully and identify whether it is a reminder, a late filing penalty, a late payment matter, or an interest statement.
- Check the two deadlines against your accounting period. Confirm whether the return is late, the tax is late, or both.
- File the outstanding CT600 as soon as you can. Filing stops the late filing penalties from climbing further.
- Pay the corporation tax due, or as much as you can. If full payment is not possible, contact HMRC about a Time to Pay arrangement before the situation worsens.
- Keep records of every payment and every call, including dates and reference numbers.
- Get advice if the figures are unclear or the penalties are mounting, so nothing is missed.
If you would like a hand, you can book a call and we will talk it through. When you are ready for us to take it on, you can request a fixed fee quote.
A worked example
The penalty ladder for a late CT600 is fixed, so it is easy to see how the numbers grow. There is a penalty of one hundred pounds the moment the return is late, a further one hundred pounds if it is more than three months late, then ten percent of the unpaid tax at six months, and a further ten percent at twelve months. Interest also runs on tax paid late at the Bank of England base rate plus four percent.
A small company files and pays late
Greenfield Joinery Limited has a year ending 31 March 2026. Its corporation tax of four thousand pounds was due by 1 January 2027, and its CT600 was due by 31 March 2027. The director was busy and dealt with neither on time. The return was finally filed seven months late and the tax was paid at the same time. Because the return was late, an immediate one hundred pound penalty applied, with a further one hundred pounds once it passed three months, giving two hundred pounds. Once the return was more than six months late, HMRC applied ten percent of the unpaid four thousand pounds, which is four hundred pounds. On top of that, interest ran on the four thousand pounds from 2 January 2027 until it was paid, because the tax was due nine months and one day after the year end. The lesson is plain. Filing and paying even a few months earlier would have removed the four hundred pound charge entirely and reduced the interest.
When to speak to an accountant
Some situations are easy to handle alone, such as a single late return where the tax is small and already paid. Others are well worth a conversation. If your company has been late more than once, the stakes rise sharply, because three late returns in a row turn the one hundred pound penalties into five hundred pounds each. If the unpaid tax is large, the ten percent charges become significant, and getting the return filed quickly really matters.
An accountant can prepare the accounts and CT600 properly, check the figures HMRC are using, help you set up a payment arrangement, and make sure no further deadlines are missed. If you think a penalty was charged unfairly, we can also review whether there is a reasonable excuse to put forward. To understand how HMRC penalties work more broadly, see our overview of HMRC penalties. When you are ready, you can start your quote and we will take the weight off your shoulders.
A clear guide to corporation tax filing and payment deadlines, the penalties for being late, and how to get back on track.
Frequently asked questions
When is my company tax return actually due?
The CT600 is due twelve months after the end of your accounting period. So a period ending on 31 March 2026 has a return deadline of 31 March 2027. The corporation tax itself is due earlier, nine months and one day after the period end, which catches many people out.
How much is the penalty if I file my CT600 late?
There is an immediate one hundred pound penalty, a further one hundred pounds if the return is more than three months late, then ten percent of any unpaid tax at six months and a further ten percent at twelve months. If you file late three times in a row the flat penalties rise to five hundred pounds each.
Does HMRC charge interest as well as penalties?
Yes. Interest is separate from penalties. It runs on corporation tax paid late at the Bank of England base rate plus four percent, from the day after the tax was due until the day it is paid. Filing on time but paying late still triggers interest.
What if I cannot afford to pay the corporation tax?
Contact HMRC before the deadline if you can, and ask about a Time to Pay arrangement that spreads the cost. Reaching out early is far better than staying silent. Interest may still apply, but a sensible arrangement keeps the debt under control. We can help you prepare for that conversation.
Is the Companies House penalty the same thing?
No, it is completely separate. Companies House charge their own penalty for filing your accounts late, and HMRC charge penalties for the CT600 and unpaid corporation tax. The two run alongside each other, so it is possible to face both at once. See our page on the Companies House late filing penalty for that side.
Should I just ignore the reminder if my company is dormant?
No. If HMRC have issued a notice to deliver a return, you must respond even if there is no tax to pay, otherwise penalties can still apply. If you believe the company is genuinely dormant, tell HMRC so their records are correct. A quick check now avoids an unnecessary penalty later.