Companies warned of increased late filing penalties
Companies House has stepped up its efforts to warn firms that they face more punitive penalties for the late filing of annual accounts.
The change in the scale of the fines that apply to companies that do not submit their accounts on time were introduced as part of the 2006 Companies Act.
As from 1 February 2009, the level of penalties rose sharply. The increases took into account inflation between 1992 and 2007, and, as a result, charges for late filing have climbed by 50 per cent.
There is also a faster rate of increase in penalties for companies that file more than one month late, and a doubling of the penalty for any company that files late having also filed late in the previous year.
As from 1 February, private companies that file late by not more than one month face a charge of £150; by more than one month but not more than three months, a charge of £375; by more than three months but not more than six months, a charge of £750; and by more than six months a charge of £1500.
Public companies that file late by not more than one month face a charge of £750; by more than one month but not more than three months, a charge of £1500; by more than three months but not more than six months, a charge of £3000; and by more than six months a charge of £7500.
When accounts are submitted late, the Registrar of Companies will simply send an invoice for the penalty to the company’s registered office address.
Companies House is advising all companies to make sure that they file their annual accounts on time to avoid the increased penalties and is reminding them that penalties will not be dropped if accounts are delayed in the post.
Private company accounts should be filed ten months after the company’s accounting reference date (reduced to nine months for accounting periods starting on or after 6 April 2008). Public companies should file their accounts seven months after the company’s accounting reference date (reduced to six months for accounting periods starting on or after 6 April 2008).
Companies House has said that the vast majority of companies are lodging their annual accounts on time and are avoiding the new penalty scheme.
Some 85 per cent of companies have been filing by the due date, and 95 per cent of registered companies have been submitting their accounts at some stage.
It is thought that compliance levels have remained high because companies are worried about any action that may harm their credit rating at a time when business finance is already difficult to access.
Companies House reported a 9 per cent decline in the number of new incorporated businesses in the three months between November and January.
There has been, however, an increase of 12 per cent in the level of information searches being carried out in the Companies House database, with more and more businesses seeking to confirm the soundness of other firms with which they are trading.