Penalties

Late filing penalties for corporation tax returns are set to be doubled for returns where the filing date is on or after 1 April 2026. Filing a corporation tax return late will now result in a £200 penalty, which will increase to £400 if the return is more than 3 months late. Where the deadline is repeatedly missed for three consecutive returns, the penalty increases to £1,000, or £2,000 if it’s more than 3 months late.

The government will also be consulting soon on other changes to HMRC’s penalty system, aiming to encourage people to fix mistakes as quickly as possible while coming down harder on anyone who deliberately tries to evade tax.

Digital communications

From spring 2026, if you use HMRC’s digital services you will start to receive digital letters by default instead of letters by post. It will still be possible to opt out if digital is not for you.

Reporting serious tax evasion

HMRC are introducing a Strengthened Reward System for individuals who make reports that help HMRC collect at least £1.5 million in unpaid tax. Not everyone qualifies and HMRC do not guarantee the reward, however the individual reporting could get between 15% and 30% of the tax due.

UK resident cryptoasset users

From spring 2026, if you are a UK resident cryptoasset user, any UK based cryptoasset service providers you use will have to report tax-relevant information about you to HMRC. This is already the case for non-UK resident cryptoasset users and is similar to how banks already report on traditional bank accounts. This change is part of ongoing international cooperation between tax authorities to monitor cryptoasset ownership.

Tax debt

HMRC is continuing to explore ways to reduce unpaid tax and speed up payments. This includes looking at whether businesses should be required to pay PAYE and VAT by Direct Debit. They also plan to hire more staff to focus on debt recovery and to use debt collection agencies more often to deal with older or harder-to-recover debts.