Companies House has updated its guidance on the penalties imposed on companies which file their accounts late.
Other than in very limited circumstances, all companies, even those which are dormant or exempt from audit, are required to file accounts at Companies House each year. Only a dormant subsidiary whose parent company has guaranteed all the subsidiary’s outstanding liabilities is exempt from this requirement.
Private companies must file their accounts within nine months of their financial year end and public companies within six months (although the Disclosure and Transparency Rules impose a shorter period of four months on public companies listed on the Main Market of the London Stock Exchange).
Companies which fail to comply with the above deadlines will be fined by Companies House and recent years have seen the Registrar adopting a strict approach to these fines.
The exact fine, shown in the table below, varies depending on whether the company is a private or public one and how late the accounts are filed:
Length of delay
Penalty: Private company
Penalty: Public company
|Less than 1 month||£150||£750|
|Between 1 and 3 months||£375||£1,500|
|Between 3 and 6 months||£750||£3,000|
|More than 6 months||£1,500||£7,500|
And for serial offenders, the fines are doubled where accounts are filed late for two successive years.
‘The dog ate my accounts…’
As noted above, Companies House takes a strict approach here and although there is a process to appeal the imposition of a fine, only exceptional circumstances will enable a company to avoid paying. Companies House states that this would need to involve “an unforeseen catastrophe” affecting the company at a critical time, giving as an example a fire destroying records a few days before the filing deadline.
Excuses such as “our accountant was ill”, “I didn’t know about the filing requirements”, “the accounts are in the post” or “I was travelling abroad” cut no ice with the Registrar no matter how genuine (or inventive).
Time to pay
If a company is able to demonstrate that it will have difficulty paying the fine in full, Companies House may agree to payment by instalments. The latest guidance has extended the period over which those instalments may be made from four to five months. In exceptional circumstances, payments can be spread over 10 months.
Clearly, however, it would be better to avoid a fine altogether by complying with the statutory deadlines and ensuring your accounts reach Companies House within the required period. So diarise the relevant dates and don’t ignore the reminders sent by Companies House as the deadline approaches.
For more information, email firstname.lastname@example.org.