Corporation Tax Late-Filing Penalties 2026: The New 'Points' System Explained
Corporation Tax Late-Filing Penalties 2026: What's Doubled, and Why the Points System Doesn't Apply
By Sam | 11 August 2026
If you run a limited company, you may have heard that HMRC is replacing the old £100 late-filing fine with a new penalty-points system in 2026.
There is an important detail to clear up first:
The new points system does not currently replace the Corporation Tax late-filing penalties for limited companies.
It applies mainly to Making Tax Digital for Income Tax, VAT and certain personal tax obligations. Corporation Tax returns still follow their existing penalty rules.
That distinction matters for directors and growing SMEs because your company’s CT600 return and your personal Self Assessment tax return are separate obligations. You could be on one penalty system for your company and another for your personal tax.
This guide explains what is changing, what is not, and how a compliant accountant can help you avoid unnecessary penalties. Accountant Search can match growing businesses with suitable accounting support from £85pm+.
The short answer: does the points system apply to Corporation Tax?
No: not at present.
The points-based system being introduced for 2026 relates primarily to Making Tax Digital for Income Tax Self Assessment, known as MTD for Income Tax. It is aimed at individuals such as sole traders and landlords who are brought into the digital reporting system.
It is not the same as Corporation Tax, which is paid and reported by limited companies.
Your company’s Corporation Tax return is still generally due:
- 12 months after the end of the company’s accounting period
- With Corporation Tax usually payable earlier, nine months and one day after the end of the accounting period
For example, if your accounting period ends on 31 March 2026, the CT600 return is normally due by 31 March 2027. The tax payment is normally due by 1 January 2027.
The current Corporation Tax late-filing penalties continue to apply if the CT600 is submitted late.
What are the current Corporation Tax late-filing penalties?
For returns with a filing date on or after 1 April 2026, HMRC can charge:
- £200 if the return is one day late
- A further £200 if the return is more than three months late, bringing the total fixed penalty to £400
- A penalty of up to 10% of the unpaid tax if the return is more than six months late
- A further penalty of up to 10% of the unpaid tax if the return is more than 12 months late
Where a company has three successive late filings, the fixed penalties are higher: the initial penalty rises to £1,000, and to £2,000 if that return is more than three months late.
These penalties relate to the return, not just the payment. A company can face separate consequences for:
- Filing its CT600 late
- Paying its Corporation Tax late
Interest can also be charged on late-paid Corporation Tax.
This is why leaving the return until the last minute can be expensive, even when the company does not owe a large amount of tax.
Where does the new penalty-points system apply?
The new points system applies to late submissions under MTD for Income Tax and certain other tax obligations.
The idea is similar to points on a driving licence:
- A missed deadline usually gives you one penalty point
- Points build up over time
- A financial penalty is charged when you reach the relevant threshold
- Further late submissions can lead to further penalties
For quarterly filers, the threshold is generally four points.
Once four points are reached, HMRC charges a £200 penalty. Each further missed submission deadline can result in another £200 penalty while the points remain at or above the threshold.
For annual-only obligations, the threshold is generally two points before the £200 penalty is triggered.
The points system is designed to be more proportionate than issuing an automatic fine after every first missed deadline. However, repeated late filing can still become costly.
What is the 2026–27 soft landing?
The first group of taxpayers joining MTD for Income Tax from April 2026 receives a limited soft landing.
For the 2026–27 tax year, HMRC has confirmed that there will be no penalty points for late quarterly updates.
The relevant quarterly update deadlines are generally:
- 7 August
- 7 November
- 7 February
- 7 May
You still need to keep digital records and send the updates. The soft landing does not remove the reporting obligation. It simply means that late quarterly updates during the first year will not generate penalty points.
There is an important exception.
The end-of-year tax return or final declaration is not covered by the quarterly soft landing. A late annual return can still attract a penalty point and, depending on your existing points position, a £200 penalty.
From 2027–28 onwards, the full MTD for Income Tax points system is expected to apply to late quarterly updates as well as the final declaration.
A simple example of how the points work
Imagine a taxpayer who is required to submit quarterly MTD updates from 2027–28.
Their position could look like this:
| Missed deadline | Points added | Financial penalty |
|---|---|---|
| First late quarterly update | 1 | None |
| Second late quarterly update | 1 | None |
| Third late quarterly update | 1 | None |
| Fourth late quarterly update | 1 | £200 |
| Fifth late quarterly update | 1 | Further £200 |
Only one point is normally added for each missed deadline. Submitting very late does not usually create several points for the same deadline.
Points are also tracked separately by tax. Your MTD for Income Tax points are not simply added to your VAT points.
How do points disappear?
If you remain below the threshold, individual points generally expire 24 months after the missed deadline.
However, reaching the threshold changes the process. Points do not simply disappear because you have paid the £200 penalty.
You may need to:
- Submit all outstanding quarterly updates and tax returns
- File all required submissions on time for the relevant compliance period
- Keep up to date with obligations from the previous 24 months
For quarterly MTD filers, HMRC’s guidance refers to a 12-month period of on-time compliance, alongside submitting outstanding obligations.
The exact position can depend on the type of tax obligation and your circumstances, so check your HMRC account or speak to an accountant if you have already received points.
What does this mean for a limited company director?
A limited company director may have several separate filing responsibilities.
The company may need to:
- File annual accounts with Companies House
- Submit a CT600 Corporation Tax return to HMRC
- Pay Corporation Tax by the correct deadline
- Operate PAYE if the company pays salaries
- Submit VAT returns if VAT registered
The director may personally need to:
- File a Self Assessment tax return
- Report dividends or other taxable income
- Report benefits or untaxed income
- Keep records for personal tax purposes
The company’s late CT600 does not become a points-based MTD submission simply because the director is also completing Self Assessment.
This is one reason growing SMEs often benefit from using a limited company accountant who can coordinate company and personal tax deadlines. You can learn more about the support available through our limited company accountant service.
Do late payment penalties work the same way?
No.
The penalty-points system relates to late submissions. Late payment penalties are separate.
For MTD for Income Tax, HMRC is introducing staged late-payment penalties based on how long tax remains unpaid. Interest can also run from the original payment due date.
For Corporation Tax, existing late-payment rules continue to apply. The tax payment deadline for most small companies is nine months and one day after the end of the accounting period.
If your business is struggling to pay, do not ignore the problem. Contact HMRC as soon as possible and ask whether a payment arrangement may be available. An accountant can also help you forecast the liability and plan payments before the deadline arrives.
How can your business stay compliant?
A few practical steps can reduce the risk of penalties:
- Create one deadline calendar for Corporation Tax, accounts, VAT, PAYE and personal Self Assessment.
- Start preparing early, especially if your year-end falls during a busy period.
- Keep digital records organised if you or anyone connected to the business is entering MTD for Income Tax.
- Check HMRC notices carefully so you know which penalty regime applies.
- Do not confuse company and personal deadlines.
- Ask for help early if records are incomplete or a payment may be late.
If you are searching for a find an accountant UK service, Accountant Search can match you with accountants who support limited companies and growing SMEs. You can find an accountant and compare suitable options from £85pm+.
For directors who need help with personal tax, you can also explore our Self Assessment accountant service. If VAT is part of your compliance workload, see our VAT accountant service.
Final takeaway
The 2026 penalty-points system is important, but it does not replace the existing Corporation Tax late-filing rules for limited companies.
For most growing SMEs:
- The CT600 remains subject to the existing Corporation Tax penalty regime
- MTD for Income Tax points apply mainly to individuals brought into the digital system
- Quarterly MTD updates receive a limited soft landing in 2026–27
- The full points system is expected to apply from 2027–28
- Company and personal tax obligations must be managed separately
If you are unsure which rules apply to your company or personal tax return, getting professional advice before a deadline is usually far cheaper than dealing with repeated penalties afterwards.