As a company you are required to file Accounts and a Confirmation Statement with Companies House and Her Majesty’s Revenue and Customs (HMRC) on an annual basis. HMRC have laid down certain rules and regulations which need to be strictly followed with regards to filing and payment deadlines. In case you are a freelancer, contractor, a sole trader, contractor or a small business owner, the task of filling your annual accounts becomes a bit easy as compared to a limited company. Because in later case, you need to meet few extra requirements with regard to filling and annual report. HMRC keep a close watch on the deadline and in case you miss the same, you will end up paying quite a heavy penalty for the same. Your responsibility of filing the accounts and reports on time becomes even more if you are the director because in this case you are personally responsible for submitting the annual accounts and reports well within time to avoid any late penalty.
Late filing penalty was first introduced in the year 1992 and its aim was to promote timely filing of the annual accounts and to encourage the directors of the companies and self-employed to file their annual accounts and reports on time. As per the rule, every company, whether private or public, large or small, trading or non-trading have to send their accounts to the Companies House every year within the pre-declared deadline. The deadline or the period you are allowed for filing your company’s accounts and reports depends on two factors, i.e. if you are filing your first account after incorporation or subsequent ones. In case you are filing your very first annual account and report since incorporation and in case you are a private company, you need to submit the same with the Companies House within 21 months of the date of incorporation else in case of a public company, you need to submit the same within 18 months from the date of incorporation or 3 months from the accounting reference date, whichever is longer. However, for second and subsequent accounts, if you are a private company, you need to file the accounts and reports within 9 months from the end of the accounting reference period and a public company has 6 months. You need to strictly follow the mentioned deadlines but in case you want to have some extra time for filing the same, you need to request the Companies House for the same. Your request for extra time may or may not get approved by the same. Companies House may extend your deadline if you mention a genuine event which you couldn’t control and thus couldn’t send your accounts on time and you have applied for the extra time before the deadline.
You can either send an email to the Companies House on firstname.lastname@example.org or you can send a letter at their registered office address:Companies House Crown Way Cardiff CF14 3UZ
What is Late Filing Penalty Fees?
A late filing penalty fee is applicable only to the company accounts and the level of penalty will depend on how late you are in submitting your accounts. You need to keep in mind that your job doesn’t gets over merely by submitting or sending your annual records before deadline. However, you have to ensure that it has to reach the Companies House before the deadline because in case you have posted your mail well before the deadline but it has reached late, you still will be applicable to pay the penalty.
|Length of period (measured from the date the accounts are due)||Private Company Penalty||Public Company Penalty|
|Not more than 1 month||£150||£750|
|More than 1 month but not more than 3 months||£375||£1500|
|More than 3 months but not more than 6 months||£750||£3000|
|More than 6 months||£1500||£7500|
Once your company falls under defaulter section, you will receive a notification from the Companies House. They issue the penalties by post which is normally sent at the registered office address of the company. The letter, along with the penalty amount, will also mention the reason behind getting the penalty and in case you miss the penalty payment deadline, your penalty amount will increase apart from enforcement proceedings.
However, with a bit of planning and little foresight, you can help yourself in not falling under penalty bracket, i.e.:
- Make sure you post your account statements to the Companies House well in advance so that it reaches them before the deadline.
- Keep a reminder in your diary or phone so that you do not miss out on it.
- Keep a note of the filing reminders which you receive from the Companies House.
- If you have accountants, then it is always better to keep them notified about the same so that they can prepare your accounts on time for you to dispatch it to the Companies House.
You can go a step ahead and register with firms like CFS International Formations who can a constant watch on the deadlines and keep you timely updated with the reminders. Firms like CFS have the advantage of holding on to the forms until their due date and thus enable you to prepare well in advance in case you wish to do so. For example, in case you have to submit your account statement by 13th December 2018, you have the option to order the service from the firm you have subscribed to well in advance, let’s say by 13th November 2017 and they will hold on to your order and once done, they will file your statement on 13th December 2018 and thus saves you from all the hassle. Apart from the reminders, professional assistance will also ensure that you submit your account statements correctly because the Companies House will not accept the accounts if they do not meet their requirements. For example, if the balance sheet is not signed, it will not be accepted by the Companies House and will be returned. In this case, you have to correct the same and send it back before the due date. In case you miss it, you will be liable to pay the Companies House penalty.