What Happens If I Miss a Deadline in My First Year

This guide explains what happens when a start up misses a tax, accounts, VAT, or payroll deadline in its first year and how to fix the issue quickly.

In the first year of running a business deadlines arrive faster than many new founders expect. Starting out means learning new rules, new responsibilities, and new reporting cycles. Missing a deadline is more common than people think especially when juggling sales, customers, cash flow, and admin at the same time.

Understanding what actually happens when a deadline is missed in year one is important because it allows founders to act quickly, limit damage, and prevent small issues turning into bigger problems. This guide explains the consequences for limited companies, sole traders, VAT registered start ups, employers running payroll, and new company directors dealing with first year accounts. It also covers penalties, how to fix the issue, how to communicate with HMRC, and how to avoid repeat problems.

Why Start Ups Miss Deadlines In Year One

The first year is a learning curve. People miss deadlines not because they do not care but because the rules and timings are unfamiliar. Common reasons include:

  • Not understanding when the first deadlines fall

  • Confusing financial year end with tax year

  • Forgetting to register for HMRC services

  • Underestimating the time needed to gather paperwork

  • Assuming HMRC will send reminders for everything

  • Trying to manage too many tasks alone

  • Not having bookkeeping set up from the start

In my opinion very few new founders miss deadlines deliberately. It happens because they are new to the system. The important thing is knowing how to correct the mistake.

The Main First Year Deadlines a Start Up Must Know

Different business structures have different obligations. Missing each type of deadline carries different consequences.

For Sole Traders

  • Register for Self Assessment by 5 October after your first tax year of trading

  • Submit Self Assessment return by 31 January

  • Pay tax by 31 January and payments on account by 31 July if required

For Limited Companies

  • File first year accounts within 21 months of incorporation

  • File Corporation Tax return 12 months after year end

  • Pay Corporation Tax 9 months and 1 day after year end

  • File confirmation statement annually

For VAT Registered Businesses

  • Submit VAT returns quarterly (or annually if on annual scheme)

  • Pay VAT by the deadline shown on the VAT return

For Employers Running Payroll

  • File RTI submissions on or before each payday

  • Submit P60s and P11Ds on time

  • Pay PAYE and National Insurance by the due date

Missing any of these can trigger penalties.

What Happens If You Miss a Self Assessment Deadline

Self Assessment is one of the most common early deadlines. If a new sole trader or company director misses the 31 January filing deadline HMRC applies penalties.

Late Filing Penalties

  • 1 day late: Automatic £100 fine

  • 3 months late: £10 per day for up to 90 days

  • 6 months late: Additional penalty, usually 5 percent of unpaid tax

  • 12 months late: Further penalty depending on circumstances

These apply even if you owe no tax. The fine is for late filing not late payment.

Late Payment Penalties

If tax is paid late HMRC charges:

  • 5 percent after 30 days

  • Another 5 percent after 6 months

  • Another 5 percent after 12 months

Interest is also applied daily.

How To Fix It

  • File the return as soon as possible

  • Pay what you can even if you cannot afford the full amount

  • Contact HMRC to arrange a payment plan

In my view the worst thing you can do is ignore it. HMRC is far more flexible when a taxpayer engages early.

What Happens If a Limited Company Misses Its First Accounts Deadline

Missing the first Companies House accounts deadline is one of the harshest penalties in UK business law.

Penalties for Late Company Accounts

  • Up to 1 month late: £150

  • 1 to 3 months: £375

  • 3 to 6 months: £750

  • Over 6 months: £1,500

These double if the company is late two years in a row. Companies House does not negotiate or reduce these penalties for small or new businesses. Even one day late still triggers the fine.

Late Corporation Tax Return

HMRC also fines companies for filing Corporation Tax returns late:

  • 1 day late: £100

  • 3 months: £100

  • 6 months: 10 percent of unpaid tax

  • 12 months: another 10 percent

Late Corporation Tax Payment

Interest applies from the day after the due date.

How To Fix It

  • File the overdue accounts immediately

  • Pay penalties as soon as possible

  • If genuinely unavoidable circumstances existed you can attempt an appeal but success rates are low

  • Put systems in place to avoid being late the following year

In my experience start ups are often caught out because the first year accounts deadline is longer than future years which causes confusion. New founders assume there is longer to prepare filings than there actually is.

What Happens If You Miss VAT Deadlines

VAT is strict because it is a tax collected on behalf of HMRC. Missing VAT deadlines creates a compliance risk.

Consequences

  • Late filing penalties under the VAT penalty points system

  • Late payment interest

  • Possible repayment plans

  • Potential visit from HMRC if deadlines are repeatedly missed

Under penalty points:

  • Each late submission earns a penalty point

  • Reaching the threshold triggers a £200 penalty

  • Additional late filings after that incur further £200 penalties

VAT is unforgiving because businesses hold VAT that must be passed on to HMRC not kept for cash flow.

How To Fix It

  • Submit the return immediately

  • Pay the VAT due or arrange a Time to Pay plan

  • Fix bookkeeping issues so future VAT returns are not delayed

What Happens If You Miss Payroll Deadlines

If a start up has employees or even a single director payroll there are strict deadlines for reporting.

RTI Late Filing Penalties

  • No penalty for the first late submission in a tax year

  • After that penalties range from £100 to £400 per month depending on the number of employees

  • Additional penalties for late payment

HMRC is strict because payroll affects tax, National Insurance, pensions, and employee rights.

How To Fix It

  • File the missed RTI immediately

  • Ensure payroll software is set up correctly

  • If using an accountant tell them early if payroll dates change

  • Check pension contributions have also been handled correctly

What Happens If You Miss Your Confirmation Statement Deadline

A confirmation statement must be filed every year. Missing the deadline does not create an immediate financial penalty but Companies House can strike a company off the register for repeated failures.

Consequences include:

  • Company becoming dissolved

  • Business bank account frozen

  • Assets becoming property of the Crown

It is one of the easiest deadlines to meet because the statement is short and inexpensive. Filing late too often can still cause serious issues.

What Happens If You Miss Bookkeeping or Record Keeping Deadlines

Although there are no official fines for everyday bookkeeping delays poor record keeping can lead to:

  • Incorrect VAT returns

  • Incorrect accounts

  • Overpayment of tax

  • Difficulty completing year end accounts

  • HMRC queries or investigations

  • Cash flow problems

  • Director’s loan account issues

In my opinion bookkeeping mistakes in year one cause more long term damage than most official penalties because they distort how a founder understands the business.

Real World Examples

Example 1: The Sole Trader Who Misses the First Tax Return

A new sole trader misses the January deadline because they assumed HMRC would send a letter prompting them. They receive a £100 fine even though no tax is owed. They file the return and pay the fine. They set up digital reminders and avoid further issues.

Example 2: The New Limited Company That Misses Accounts

A company is one day late filing accounts. Companies House automatically charges £150. There is little chance of appeal. The founder does not realise that the penalty will double next year if they are late again. They hire an accountant to take over submissions.

Example 3: The Start Up That Misses a VAT Return

A small business forgets a quarterly VAT return while busy preparing for launch. They get a penalty point. The next return is also late which moves them closer to the penalty threshold. They fix the issue by moving to automated bookkeeping.

Example 4: The Director Who Forgets Payroll

A director pays themselves but forgets to run payroll. HMRC sees irregular PAYE data and issues a warning. They file late but avoid penalty because it is the first time. They set a recurring reminder.

How Serious Is Missing a First Year Deadline

The seriousness depends on the type of deadline:

  • Self Assessment: Annoying but manageable

  • Company accounts: Expensive and hard to appeal

  • VAT: Significant risk if repeated

  • Payroll: Moderate risk depending on frequency

  • Confirmation statement: Low risk unless repeatedly missed

  • Corporation Tax: Interest adds up quickly

The biggest dangers are when:

  • The company misses multiple deadlines at once

  • The founder ignores letters from HMRC or Companies House

  • The problem continues into year two

  • Bookkeeping is so poor that deadlines cannot be met

Missing one deadline is fixable. Missing several signals deeper problems with systems or support.

What You Should Do Immediately If You Miss a Deadline

1. File or pay as soon as possible

Penalties increase over time. The sooner you act the lower the cost.

2. Contact HMRC if you cannot pay

HMRC is far more flexible when you engage early. A Time to Pay plan may be available.

3. Check what caused the delay

Look at workload, organisation, software, or guidance gaps.

4. Put systems in place

Use automated reminders, digital software, and a proper diary of deadlines.

5. Consider hiring an accountant

In my opinion this is one of the easiest ways to protect a new business from missing legal deadlines again.

How to Prevent Late Deadlines in Future

  • Set up cloud bookkeeping from day one

  • Keep personal and business bank accounts separate

  • Learn the filing dates for your specific business structure

  • Use a digital calendar with warnings

  • Review accounts monthly not annually

  • Do not wait until the last minute to gather documents

  • Use an accountant who manages deadlines for you

  • Check Companies House and HMRC portals monthly

A small amount of organisation prevents almost all first year problems.

Final Thoughts

Missing a deadline in your first year is stressful but it is rarely the end of the world. Whether the issue involves Self Assessment, VAT, company accounts, payroll, or Corporation Tax, the consequences can be fixed. The key is to act quickly, understand the penalty structure, and put better systems in place so the same problem does not happen again.

In my opinion start ups should view a missed deadline as a signal that they need more support, clearer processes, or better bookkeeping rather than as a sign of failure. Every business owner learns through experience and the first year naturally involves mistakes. What matters is correcting them early and building stronger habits for the years ahead.