Directors should make a diary date for filing deadlines

A £165m reminder to directors on the importance of getting accounts filed on time has been flagged in the latest report from Companies House, the body responsible for the UK's register of limited companies.

Every company director, or a designated member of a Limited Liability Partnership (an LLP), is personally responsible for accounts being delivered to Companies House on time, and in the right format, including when a company is not trading and treated as ‘dormant’.

It is a criminal offence under the Companies Act 2006 for directors to file their company accounts late and once the deadline passes, the clock will start ticking towards possible prosecution for directors.  And, unlike most criminal offences, the prosecution doesn’t have to prove intent on the part of the directors, only that they didn’t file the accounts on time, making prosecution relatively easy to secure.

Said corporate expert Justin Pinches of Kingston-based law firm Carter Bells LLP:  “It’s important to take a full view of your role and responsibilities as a director and not make any assumptions or see reporting matters as something you don’t need to worry about because a fellow director takes the lead on this, or a professional firm.

“Even a missed signature could result in a late filing penalty. And for those still relying on the postal system for paper accounts, Companies House say that five days must be allowed for checking, so meeting a tight deadline isn’t enough on its own.”

The statistics from Companies House show that 98.5% of accounts were filed on time, but the 1.5% that missed their deadline resulted in 323,643 penalties being levied with a total value of £164.7m.  The average penalty was £509 but almost £80m was raised by 80,000 ‘double penalties’, charged when companies file their accounts late for two successive years or more.

If your first accounts cover a period of more than 12 months, you must deliver them to Companies House within 21 months of the date of incorporation (18 months for public companies), or 3 months from the accounting reference date - whichever is longer.  After that, in subsequent years, a private company or LLP has nine months from the end of the accounting reference period.

Added Justin:  “ Late filing may seem a relatively small failure, but a conviction is one that has many consequences, such as being required to notify professional bodies and even having an impact on freedom to travel overseas, as a criminal record may mean certain countries will stop you from entering.

“It’s a good idea to sign up for reminder emails from Companies House, whether or not you are the main person responsible, as they will alert you when the filing deadline is approaching.”