If your company is liable for Corporation Tax, you are required to complete, submit and pay correct tax returns to HM Revenue and Customs (HMRC) on time. If you don’t do so, then you may face a penalty.

For completing and submitting accurate tax returns, you need to have all your business records. Furthermore, HMRC may ask you for such records. That is why you need to keep records of your business transactions.

If your company is liable to pay corporation tax but doesn’t receive a ‘Notice to deliver a Company Tax Return’ from HMRC, you need to tell HMRC immediately. You will have to inform HMRC within 12 months of the end of your Corporation Tax accounting period. If you don’t, HMRC may charge you a ‘failure to notify’ penalty.

In case if you have made an error or mistake, you must correct it immediately. Do not make another mistake of hiding from HMRC otherwise you may be charged a harsh penalty.

By applying a percentage to the amount of tax that you owe, the amount of the penalty is calculated. However, this percentage depends on whether your error was careless or deliberate or deliberate and concealed.

Type of failure Maximum penalty payable

Non-deliberate 30% of the potential lost revenue

Deliberate but not concealed 70% of the potential lost revenue

Deliberate and concealed 100% of the potential lost revenue

You need to remember when you take reasonable care but still make a mistake; HMRC may not charge a penalty right away and suspend your penalty for some time if certain conditions are met.

The percentage of penalties can be less if you tell HMRC and disclose the facts. You can also give HMRC the access to the records for calculating your owned taxes.

If you want to discuss your corporation tax in the UK, our tax accountants are here to help you. Get in touch with us at 020 7060 9556 or info@harleystreetaccountants.co.uk.