Tax related or Tax geared penalties

When a company fails to deliver its return within 18 months after the end of the Accounting Period it is potentially liable to a tax geared/tax related penalty, as well as Flat/Fixed rate penalties. The amount of the penalty is based on the tax unpaid at the 18 month point (or for Corporation Tax Self Assessment periods the filing date, if this is later than the 18 month point). If the return is delivered between 18 months and 2 years after the end of the Accounting Period the penalty is 10% of the unpaid tax. If the return is delivered more than 2 years after the end of the Accounting Period the penalty is 20% of the unpaid tax. The penalties are called tax geared for Corporation Tax Pay & File Accounting Periods and tax related for Corporation Tax Self Assessment Accounting Periods.