The Freedom of Information request to HMRC shows that it has issued more than £16 million in fines to mid-sized businesses for Corporation Tax failings.
This is eight times the size of fines issued to this same size of business when compared to five years ago, with many of the fines the result of issues with R&D tax relief and transfer pricing.
The request, submitted by law firm BCLP to HMRC’s wealthy and mid-sized business unit, shows that compliance checks increased from 2,099 in 2020-21 to 4,506 in 2024-25.
The unit, which targets mid-sized businesses with turnover between £10m to £200m, has intensified its checks on Corporation Tax as the Government attempts to tackle the nation’s £46.8 billion tax gap.
HMRC’s own figures show that businesses of all sizes account for around 60 per cent of unpaid and disputed tax.
The request submitted by the law firm also showed that HMRC is increasingly checking on capital gains made by companies, which are recorded as part of their Corporation Tax filing.
In the 2024/25 tax year alone, £239m of tax was under review by HMRC, which BCLP says reflects the increased challenges around asset disposals, valuations and the use of associated tax reliefs.
Crackdown on Corporation Tax
Corporation Tax is clearly in HMRCs sights, as for the first time in over 25 years the Government is introducing major reforms to the Corporation Tax late filing penalty regime.
Announced in the 2025 Autumn Budget, the changes are intended to address the impact of inflation on penalty levels that have remained largely unchanged for almost three decades.
From one April 2026, companies that miss the filing deadline will face a £200 penalty, double the current £100 charge.
Where a return is more than three months late, the penalty will increase to £400. Businesses with a pattern of non-compliance will face steeper sanctions, with the maximum penalty rising to £2,000 for three consecutive late filings.
HMRC estimates that the revised regime will generate around £60 million each year. These measures form part of a broader set of Budget announcements, including the extension of the freeze on Income Tax thresholds until 2031.
If you are concerned about your Corporation Tax filings or need advice before preparing your next return, please get in touch with our experienced team.