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Overdue accounts in UK Companies House, rise in company accounts filed post-deadlines

Among the many day-to-day things that have been affected by the COVID-19 pandemic, perhaps the most integral yet understated aspect is the ongoing Companies House filing obligations that firms in the UK are subject to.

Every year, companies in the UK must file their ‘statutory accounts’ from their annual report to Companies House. Regulated by a deadline, late payment attracts penalties.

In 2018, 223,640 companies filed accounts late 2018, up 2% from 2017 when 218,884 companies filed late and representing 5.3% of total filers.

As March 2019 came to an end, there were as many as 4,202,044 companies on the list, an increase of approx. 4.2% on the previous year.

The surge in late filing resulted in a record number of fines being handed out, with the worst offenders fined penalties of up to £7,500 where accounts were more than six months late.

The wave of social distancing and strict regulations in the UK lead to over 25,000 limited companies missing their accounts deadline last year, resulting in unnecessary late filing penalties being issued.

Companies House has not confirmed the financial value of penalties levied in the last 12 months with the annual report and accounts yet to be declared but the total revenue raised, as more companies missed the crucial deadline last year due to the pandemic that has swept the world.

On 26 June 2020 measures were introduced to delay the deadline by which filing of accounts had to be done to relieve the burden on businesses during the covid-19 outbreak and allow them to focus on continuing to operate. A company’s filing deadline was extended if it fell any time from 27 June 2020 to 5 April 2021.

This extension was based on

  • company type (Public limited companies (PLCs), Private company, LLP)
  • accounting reference dates: all companies – trading, non-trading, or dormant – must provide accounts to Companies House no more than nine months after the end of their financial year, ending on the company’s Accounting Reference Date (ARD)
  • previous extension request status
  • extension or shortening of the accounting reference period
  • first-time filing of accounts – new limited companies can file their first accounts at Companies House no more than 21 months after their incorporation date

When this extension was granted almost 10 months ago, the second wave of the pandemic was not expected to hit at this intensity. Not only are businesses continuing to limp towards normalcy, but they are also far from being ready to allocate resources and time towards preparing year-end accounts for compliance.

The deadline of 5 April is expected to have affected up to 300,000 UK companies to file their annual accounts.

As Companies House encourages more companies to head toward a digital filing, the onus rests on company directors to ensure that they don’t fall prey to late filing penalties. Filing digitally is not only easy and fast but also gives you the added advantage of validating your data to ensure an error-free submission.

XBRL managed tagging services for HMRC