UK CBAM penalties: what HMRC can charge, and how each one is worked out

Last verified: 4 November 2026

Author: Oremly

Short answer: Finance Act 2026 gives HMRC six penalties for UK CBAM. Missing the registration deadline is charged as a percentage of the "potential lost revenue", the CBAM you are liable for between the deadline and registering (up to 30% if it was not deliberate), not a flat fine. A late return earns a penalty point, and only costs £200 once you reach the points threshold. Late payment costs 3% of the unpaid tax after 15 days, another 3% after 30 days, then 10% a year, plus interest. Careless errors cost up to 30% of the extra tax, which can fall to nothing if you tell HMRC first. Not keeping records costs £500, and that one applies to every business importing CBAM goods from 1 January 2027, even if you never reach £50,000. Not telling HMRC about a change to your registration details costs £500 plus £40 a day.

This post is for finance and operations teams at steel stockholders, fastener importers, builders' merchants and aluminium fabricators. It sets out each penalty, the law behind it, a dated worked example for a fastener importer, and what to do now. It is not tax advice. Oremly is software and plain-English guidance.

The six penalties at a glance

What goes wrong	Deadline	Penalty	Where the law is
You do not register, or register late	31 January 2028 if you trigger registration in 2027; after that, 30 days from the day you trigger it	A percentage of the "potential lost revenue": up to 30% if not deliberate, 70% if deliberate, 100% if deliberate and concealed	FA 2026 Sch 17 para 34, applying FA 2008 Sch 41
You file a return late	31 May 2028 for 2027; 31 July 2028 and 29 September 2028 for the first two quarters of 2028; then the last working day of the second month after each quarter	One penalty point per late return; £200 once you reach the threshold	Para 35, applying FA 2021 Sch 24
You pay late	Same dates as the returns	3% at day 15, another 3% at day 30, then 10% a year, plus late payment interest	Para 37, applying FA 2021 Sch 26; FA 2009 s.101
Your return contains an error	Not a deadline: it depends on how careful you were	Careless: up to 30% of the extra tax. Deliberate: up to 70%. Deliberate and concealed: up to 100%	Para 36, applying FA 2007 Sch 24
You do not keep or preserve records	From 1 January 2027, for six years	£500	Para 39; S.I. 2026/802 regs 5 and 6
You do not tell HMRC about a change to your registration details	30 days from the change, or from finding the mistake	£500, plus £40 for each day after the deadline	Para 38

Two general points. First, a reasonable excuse cancels most of them. A shortage of money does not count unless events outside your control caused it (and for the records and notification penalties it never counts), and relying on someone else, such as a customs broker, only counts if you took reasonable care yourself. Second, for CBAM the Act changes the registration and error penalty rules so that HMRC "may" assess them, where the general rules for other taxes say "shall". That gives HMRC discretion. It does not mean it will not charge.

1. Registering late: a percentage, not a fixed fine

The duty. You must register once you trigger registration under Schedule 17, paragraph 2. Normally that is within 30 days. If you trigger registration at any point in 2027, the Transitory Provision Regulations give you until 31 January 2028, because registration only opens on 1 January 2028.

When you trigger it. The law applies the 12-month look-back when "it is the first day of the month". HMRC's registration date guidance says that once the threshold is met, "you may be liable to register for CBAM from the date your imports met the £50,000 registration threshold". Plan from the earlier of the two dates. Our CBAM threshold checker works this out from monthly totals or a CSV of your import lines.

The penalty. Paragraph 34 adds CBAM to the "failure to notify" rules in Schedule 41 to the Finance Act 2008. The penalty is a percentage of the "potential lost revenue":

Behaviour	Maximum	Lowest if you tell HMRC before it finds out (unprompted)	Lowest if HMRC prompts you
Not deliberate	30%	0% if HMRC learns of it within 12 months of the tax first being unpaid; otherwise 10%	10% within 12 months; otherwise 20%
Deliberate, not concealed	70%	20%	35%
Deliberate and concealed	100%	30%	50%

For CBAM, the potential lost revenue is the CBAM you are liable for over the period that starts when your registration deadline passes and ends on the day you register, or the day HMRC becomes fully aware that you should have. How HMRC will apply that window to a 2027 trigger, where the deadline is the fixed date of 31 January 2028, it has not yet said. HMRC's failure to notify factsheet CC/FS11, which its CBAM pages link to, does not yet list CBAM among the taxes it covers.

What else happens. Registering late does not stop the tax being due. Under the Act, a "registrable" person, one who has triggered registration but not registered, must file returns and pay CBAM just as a registered person must. HMRC can register you itself and assess the tax due. If tax is lost because you did not register, HMRC has 20 years from the end of the accounting period to assess it, instead of 4 years at most.

2. Filing a return late: points first, then £200

UK CBAM uses the points-based late submission system in Schedule 24 to the Finance Act 2021, the same system that applies to VAT returns.

• Each late return earns one penalty point.
• When a late return takes you to the threshold, you pay £200, and £200 again for every later late return while you stay there. The threshold is 2 points for annual returns and 4 points for quarterly returns.
• Points expire. For quarterly returns, all your points go once you have filed every return on time for 12 months and have no returns outstanding from the previous 24 months.

For CBAM, the 2027 return (due by 31 May 2028) counts as an annual return, and the 2028 returns as quarterly ones. So one late 2027 return earns one point and no £200 on its own. What HMRC has not explained is how a point from the 2027 return carries over to the quarterly returns that follow. The general rules add 2 points when a business moves from annual to quarterly returns, which would bring you closer to a £200 penalty. Our advice: file the 2027 return on time.

Filing late also lets HMRC estimate your CBAM "to the best of their judgement" and assess you for that amount.

3. Paying late: 3%, 3%, then 10% a year

Late payment is charged under Schedule 26 to the Finance Act 2021:

• Nothing if you pay in full within 15 days of the due date.
• First penalty: 3% of whatever is still unpaid at the end of day 15, plus another 3% of whatever is still unpaid at the end of day 30.
• Second penalty: from day 31, 10% a year on the unpaid amount, until you pay.
• If you ask HMRC for time to pay within the first 15 days and it agrees, the first penalty does not apply. Ask between days 16 and 30 and only the second 3% is avoided. Break the agreement and the penalties come back.

On top of the penalties, late payment interest runs from the due date until you pay (S.I. 2026/994 applies it to CBAM from 1 January 2027). HMRC's standard late payment interest rate is the Bank of England base rate plus 4%: 7.75% from 9 January 2026, still the rate shown on HMRC's page on 4 November 2026.

4. Errors in a return: it depends how careful you were

Paragraph 36 brings CBAM returns into the inaccuracy rules in Schedule 24 to the Finance Act 2007. The penalty is a percentage of the extra tax the error would have cost HMRC:

Behaviour	Maximum	Lowest, unprompted	Lowest, prompted
Careless	30%	0%	15%
Deliberate, not concealed	70%	20%	35%
Deliberate and concealed	100%	30%	50%

If you took reasonable care and still got it wrong, there is no penalty. An error you did not make carelessly becomes careless if you later find it and do not take reasonable steps to tell HMRC. HMRC can also suspend a penalty for a careless error for up to two years, and cancel it if you meet the conditions it sets.

Two CBAM-specific points:

• You may amend a return only to correct an error. You cannot amend a return to swap default values for your supplier's actual emissions data. See default values or supplier data before you file.
• The commonest errors are likely to be weight (net mass, without packaging, in kilograms), commodity code and emissions intensity. HMRC updated its record-keeping guidance on 3 November 2026 to explain how to record net mass, using the same method as the import declaration.

5. Records: £500, even below the threshold

The Administrative Provisions Regulations, regulation 5, apply to "a person who imports a CBAM good in the course of a business", not only to businesses that register. HMRC's guidance puts it the same way: "Anyone importing CBAM goods into the UK will need to keep records of the CBAM goods they have imported from 1 January 2027." For each CBAM good, keep:

1. the 8-digit commodity code and description

2. the date it was imported

3. its value

4. its net weight

If you register, also keep evidence of the information you gave when registering, and, if you file returns, proof of origin. HMRC's guidance adds evidence for any exemption you rely on, verification reports if you report actual emissions (S.I. 2026/995 reg 16; not needed for goods on default values), and your Carbon Price Relief workings.

Keep records in writing (electronic counts) for six years: from the day after the end of the accounting period they relate to, or otherwise from the day they were created. For goods imported in 2027, that means keeping the records until at least 31 December 2033.

The penalty for failing to keep or preserve a record is £500. If your weight records are missing, HMRC can also work out the weight itself, using estimates and comparisons with similar goods. HMRC's guidance also warns that "Separate penalties may apply if you do not provide information or documents when asked to by HMRC."

6. Not telling HMRC about changes: £500 plus £40 a day

Once registered, you must tell HMRC within 30 days if information you gave when registering changes, or if you find it was wrong (paragraph 4). That includes your name, addresses, contact details, legal form, EORI number and VAT number. If you do not, the penalty is £500 plus £40 for each day after the deadline that you still have not told HMRC. The same penalty applies if you take over the business of a registered sole trader who has died or become incapacitated and do not tell HMRC within 21 days.

Worked example: what slips would cost one fastener importer

Illustrative only, prepared on 4 November 2026. The business, dates and tonnages are made up. The emissions figure is the draft default value and the rate is HMRC's illustrative rate, because the real rates are not yet published.

A fastener importer's CBAM imports reach £50,000 on Tuesday 14 September 2027. That is its planning date under HMRC's guidance. The law's first-of-month test finds the threshold on Friday 1 October 2027. Either way it triggers registration in 2027, so it must register by Monday 31 January 2028, and its 2027 return and payment are due before the end of Wednesday 31 May 2028.

Its 2027 return covers 50 tonnes of hexagon bolts (commodity code 7318 15 82, steel other than stainless, tensile strength under 800 MPa) charged to CBAM. 50 × 4.796 tCO2e per tonne (draft default value) = 239.8 tCO2e, × £9.69 (HMRC's illustrative iron and steel rate) = £2,323.66.

What goes wrong	Dates	What it costs
Nothing	Registers in January 2028; files and pays by 31 May 2028	£0
Pays late (return on time)	Pays on Friday 14 July 2028. Still unpaid at the end of Thursday 15 June (day 15) and Friday 30 June (day 30)	3% + 3% = £139.42; 10% a year for the 14 days from 1 to 14 July = about £8.89; penalties about £148.31. Plus late payment interest at 7.75%: about £21.65 for 44 days if the rate does not change
Pays 10 days late instead	Pays on Saturday 10 June 2028, within the 15 days	No penalty; interest only, about £4.92
Files the 2027 return late	Files on Friday 30 June 2028	One penalty point, no £200 on its own (see section 2 on carry-over)
Understates the weight by 10 tonnes (carelessly)	Reports 40 tonnes instead of 50	Extra CBAM: 10 × 4.796 × £9.69 = £464.73. Penalty up to 30% = £139.42; at least 15% = £69.71 if HMRC finds it first; can be £0 if the business tells HMRC first
Moves office and forgets to tell HMRC	Moves on Monday 3 April 2028, so must notify by Tuesday 2 May 2028. Still has not told HMRC on each of the 10 days from 3 to 12 May	£500 + 10 × £40 = £900
Loses its weight records for one shipment	Any time in the six years	£500, and HMRC can estimate the weight

The late payment is the one that grows quietly: after day 30 it costs about £0.63 a day in penalty on £2,323.66, plus interest of about £0.49 a day.

What to do now

1. Start keeping records on 1 January 2027, for every CBAM import, whatever your total. Commodity code, import date, value and net weight, by line.

2. Track your running total so you know your threshold date on both the law's reading and HMRC's. Use the earlier one.

3. Register by 31 January 2028 if you trigger registration at any point in 2027.

4. Put 31 May 2028 in the diary for the 2027 return and payment, then 31 July and 29 September 2028 for the first two 2028 quarters.

5. If you cannot pay, call HMRC before day 15. A time to pay agreement made from proposals you put forward in the first 15 days avoids the first penalty.

6. If you find an error, tell HMRC before it asks. For a careless error that can take the penalty to nothing.

7. Set a 30-day reminder for any change to your company details after you register.

8. Write down your reasoning on anything uncertain (classification, origin, a borderline exemption). It is the evidence of reasonable care. For unsettled questions, see how to contact HMRC about UK CBAM.

Reader questions

Can I be fined if my imports never reach £50,000?

Yes, for records. The record-keeping duty covers anyone importing CBAM goods in the course of a business from 1 January 2027. The penalty for not keeping or preserving them is £500. The registration, return and payment penalties only apply once you trigger registration.

Is there a fixed fine for registering late?

No. It is a percentage of the potential lost revenue, between 0% and 100% depending on your behaviour and whether you told HMRC first. A reasonable excuse cancels it if the failure was not deliberate.

Does a late 2027 return cost £200?

Not on its own. It earns one penalty point. The £200 comes when you reach the threshold, which is 2 points for annual returns and 4 for quarterly ones.

What counts as a reasonable excuse?

The law does not list excuses. It rules out a shortage of money (unless events outside your control caused it, and for the records and notification penalties in all cases) and, unless you took reasonable care, relying on someone else. HMRC's factsheet describes it as "something that stopped you from meeting a tax obligation on time which you took reasonable care to meet."

Can I appeal?

Yes. Schedule 17 lets you appeal HMRC's decisions on registration, returns and the records and notification penalties, and the penalty schedules it applies have their own appeal rights. HMRC or a tribunal can also reduce the records and notification penalties, including to nil. Those two are not charged if you have already been convicted, or given another penalty, for the same conduct, and HMRC must assess them within 4 years of the failure starting (20 years if CBAM was lost deliberately or through a failure under the registration rules).

Are there criminal offences?

Yes, for fraudulent evasion and for knowingly or recklessly giving false information, or using false documents to deceive (Schedule 18). They are aimed at dishonesty, not honest mistakes.

Where Oremly fits

Oremly maps each product to its commodity code and keeps a running £50,000 total from your import entries, so you can see the day you reach the threshold and the first-of-month check that follows. Keeping those import lines in one place is also the start of the six-year record HMRC expects. You still register, file and pay HMRC directly.

Sources

Primary sources checked on 4 November 2026:

• Finance Act 2026, Schedule 17 (administration of CBAM: para 2 registration, para 4 changes, paras 6 to 8 payment, returns and amendments, paras 14 and 15 records, paras 20 and 24 assessments and time limits, paras 33 to 48 penalties and appeals)
• Finance Act 2026, Schedule 18 (offences)
• The CBAM (Administrative Provisions) Regulations 2026, S.I. 2026/802 (records, registration information, weight)
• The CBAM (Transitory Provision) Regulations 2026, S.I. 2026/830 (31 January 2028 registration deadline; 2027 and 2028 return and payment dates; late return points)
• The Finance Act 2009, Sections 101 and 102 (CBAM) (Interest) (Appointed Day) Order 2026, S.I. 2026/994 (late payment interest)
• Finance Act 2008, Schedule 41 (failure to notify), Finance Act 2007, Schedule 24 (errors), Finance Act 2021, Schedule 24 (late returns) and Schedule 26 (late payment)
• Keeping records for CBAM (HMRC, updated 3 November 2026)
• CBAM: policy summary (HMRC, updated 2 November 2026; section 9, compliance and penalties)
• Work out the date you'll need to register for CBAM and Check if you'll need to register for CBAM (HMRC, 16 July 2026)
• Compliance checks: penalties for failure to notify, CC/FS11 (HMRC, updated 19 March 2026)
• HMRC interest rates for late and early payments (HMRC, updated 23 December 2025)
• The CBAM (Default Values) Force of Law Notice (Draft) and Illustrative CBAM rates (16 October 2026)

---

Free founding access until 1 January 2027. No card required. From 1 January 2027, Oremly is £149/month, and founding members keep that price until 1 January 2029. We'll notify you before billing starts.