New figures show that HMRC has imposed over £16 million in Corporation Tax penalties on mid-sized businesses, highlighting a sharp rise in compliance enforcement.
The data, released following a Freedom of Information request by law firm BCLP, reveals that penalties issued to this group are now eight times higher than they were five years ago.
Many of the fines stem from errors relating to R&D tax relief claims and transfer pricing arrangements.
The same request shows a significant increase in the number of compliance checks carried out by HMRC’s wealthy and mid-sized business unit.
These checks rose from 2,099 in the 2020–21 tax year to 4,506 in 2024–25. The unit targets businesses with turnover between £10m and £200m and has stepped up activity as the Government seeks to close the UK’s £46.8 billion tax gap.
HMRC’s published data suggests that businesses of all sizes are responsible for around 60 per cent of unpaid or disputed tax.
There is also growing scrutiny of capital gains reported through Corporation Tax returns, particularly where disposals, valuations and reliefs are involved.
In the 2024–25 tax year alone, £239m of tax was under review by HMRC, which BCLP says reflects the increasing complexity of corporate transactions and tax reporting obligations.
Stricter Corporation Tax penalties on the horizon
Corporation Tax compliance is set to become even more important. As part of the 2025 Autumn Budget, the Government confirmed major changes to the late filing penalty regime, the first significant reform in more than 25 years.
From one April 2026, companies that miss their filing deadline will face a £200 penalty, doubling the current charge.
Returns that are more than three months late will attract a £400 penalty, while businesses with repeated late filings could face penalties of up to £2,000.
HMRC estimates that these changes will generate approximately £60 million per year. The reforms sit alongside other Budget measures, including the extension of the freeze on Income Tax thresholds until 2031.
If you are unsure whether your Corporation Tax filings are fully compliant, or would like support ahead of your next return, our team can provide clear, practical advice.
