Autumn Budget 2025
Corporation tax returns that are due to be filed on or after 1 April 2026 will carry a significantly heavier penalty, if filed late, being a doubling across all previous rates. The initial penalty will rise from £100 to £200, then from £200 to £400 if more than three months late, whilst the penalty for three successive failures will become £1,000, and three successive failures of more than three months late will double to £2,000.
A further change has been announced from 6 April 2026 for businesses incorporating from their existing sole trade or partnership business. It is now necessary to elect for incorporation relief to apply (which broadly means no capital gains tax is due on the transfer of an existing business to a company), whereas previously it was automatic providing all the conditions were met. Presumably this move is to increase visibility to HMRC, particularly around property business incorporations.
