Compliance Double Whammy from Companies House
If your company needs to submit Annual Financial Statements (to give accounts their statutory name) to Companies House (and all but the smallest do), as from the first financial year beginning after 6th April 2008, the period allowed from the year end until the accounts have to be lodged is reduced from ten months to nine for private companies and from seven months to six for plcs. If your financial year ends on 5th April 2008 or earlier in the year, the change will affect your 2009 Accounts. For the rest, including the majority of private companies who have a 31st December year end, it will be 2010 before the change is felt. Thus any accounts for the year ended 31st December 2010 will require to be lodged with the Registrar by 30 September 2011 for private companies and 30 June 2011 for plcs.
Almost as soon as the filing periods have been shortened, the civil penalties for late filing are being increased from 1st February 2009.
Companies House, in its latest Annual Report, indicated that 95.4% of all UK companies requiring to lodge accounts had done so. Not all of these filed within the legal time limit but the effectiveness of the penalties regime is shown by the fact that only 4.6% did not file at all. To encourage even greater compliance, the penalties will increase as shown in the following table for private companies and public companies, (the reference to "Length of Period" below being to the length of the period from the last day on which the accounts could have been filed without penalty until the date on which they are actually filed).
Length of period
Private company
now from 1 feb 2009
£100 £150 not more than 1 month
£100 £375 more than 1 but not more than 3 months
£250 £750 more than 3 but not more than 6 months
£500 £1,500 more than 6 months
Public company
now from 1 feb 2009
£500 £750 not more than 1 month
£500 £1,500 more than 1 but not more than 3 months
£1,000 £3,000 more than 3 but not more than 6 months
£2,000 £7,500 more than 6 months
If increases in penalties ranging from 50% for those who delay for up to one month (a new initial period introduced from 1st February 2009) to nearly four times the present penalties for public companies who delay lodging their accounts for more than six months, coupled with the doubling of the applicable penalty for companies who delay filing in successive years, does not provide sufficient incentive to lodge your accounts on time, then the next way for Companies House to get your attention could be to strike your company off the Register.
Even if you think that you might have an excuse for delay – think again. The Registrar has not accepted anything short of a personal tragedy affecting a sole director or the destruction of company records, both near to the deadline date (mere serious illness has not sufficed) as a reason. Filing on time is therefore essential.
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