What late filing penalties really cost

The cost of forgetting a filing is almost always bigger than the filing itself. A confirmation statement costs a few pounds; missing it threatens your whole company. Form 5472 costs nothing extra to file on time and $25,000 to forget. That asymmetry is the entire point of this post, and it’s the reason compliance is worth automating rather than remembering.

Here’s a concrete, cross-border roundup of what real deadlines actually cost when you blow them — US federal, US state, and UK. Numbers are current at the time of writing and some carry enforcement nuance, which we flag. Treat the figures as orders of magnitude that should scare you into setting a reminder.

The penalties side by side

One table, the headline numbers, before the detail.

US federal — where the big number lives

Form 5472 is the one to fear. A foreign-owned single-member US LLC must file Form 5472 with a pro-forma Form 1120 every year. It’s an information return reporting transactions between the LLC and its foreign owner — not a tax calculation. The penalty for filing it late, incomplete, or not at all starts at $25,000 per form, per year, and keeps climbing if you ignore an IRS notice. The cruelty is that it lands even when you owed zero tax, made zero dollars, or did nothing all year. Non-residents get hit by this more than any other penalty because they assume “no income means no filing.” It doesn’t. This single form is why automating your compliance pays for itself many times over.

BOI / FinCEN sits in a different category: historically severe on paper, genuinely uncertain in practice. The beneficial ownership information report carried steep civil and even criminal penalties as written, but enforcement against foreign-owned entities has been on-again, off-again, and the rules have been revised more than once. We won’t assert a hard current rule here because it keeps moving. The honest guidance: don’t rely on last year’s understanding, and check your status against FinCEN’s latest guidance rather than assuming you’re either safe or doomed.

Ordinary IRS late filing follows a cleaner formula. Miss the deadline for a return that owes tax (an 1120 with tax due, a 1040) and the failure-to-file penalty is generally 5% of the unpaid tax per month, up to 25%. A separate failure-to-pay penalty of 0.5% per month runs alongside it, plus interest on the balance. File on time even if you can’t pay — the late-file penalty is ten times heavier than the late-pay one, so filing always beats hiding.

US state — the slow-motion penalty

State penalties start small and end big. Miss a state annual report and you’ll first see a modest late fee. Ignore that and the state flips your status to not in good standing, then administratively dissolves the company.

That last step is the expensive one, even though it doesn’t come with a flashy number. A dissolved LLC loses its liability shield — the protection you formed it for — for the period it was dead. Reinstatement means paying every back fee, every penalty, and a reinstatement charge, routinely several hundred dollars all in. In some states, dawdle long enough and someone else can register your company name. So the “cost” of a missed annual report isn’t the late fee; it’s the cascade. The full escalation is laid out in how to keep an LLC in good standing.

Franchise-tax states add their own penalties on top. California keeps chasing unpaid $800 franchise tax with penalties and interest year after year, even after you’ve stopped using the company.

UK — Companies House and HMRC

The UK is more transparent about its numbers, which makes the lesson clearer.

Companies House late accounts run on a published scale for private companies: £150 if your annual accounts are up to a month late, £375 up to three months, £750 up to six months, and £1,500 more than six months late. File late two years in a row and the penalty doubles. Unlike a tax penalty, this one is automatic and isn’t tied to whether you owe anything — it’s purely about the filing date. Keep your accounts and your confirmation statement on time and it’s all avoidable.

HMRC self assessment starts with an automatic £100 the day after the 31 January deadline — and you owe it even if your tax bill is zero or you’re due a refund. Leave it three months and £10-a-day penalties kick in, up to £900. At six and twelve months, further penalties of 5% of the tax owed (or £300 if greater) land on top. Paying late is penalised separately, with interest, on its own schedule. The £100 looks trivial; the escalation is what gets people who keep putting it off.

The lesson, in one line

Across every jurisdiction the pattern repeats: the penalty punishes forgetting, not owing. A company that made nothing still gets the $25,000 5472 penalty, still loses good standing, still pays £150 to Companies House and £100 to HMRC. That’s actually reassuring, because forgetting is the one failure you can fully engineer away with a calendar and early reminders. For the combined US-and-UK version of that calendar, see the cross-border founder’s compliance calendar.

Filing on time is cheap. Forgetting is not. We track your deadlines from your real filing dates, remind you early enough to act, and prepare the filings so none of these numbers ever appear on a notice addressed to you.