Earlier this year Companies House published guidance on the approach it adopts towards companies and LLPs that file their accounts late. Below is a summary of the key points that have arisen from this updated guidance.
Accounting Reference Date
For companies and LLPs, their accounting reference date is the last day of the month in which their anniversary of incorporation falls. Therefore, if a company or LLP were incorporated on 1 March 2014, its first accounting reference date would be 31 March 2015, and its next accounting reference date would be 31 March 2016.
Accounting Reference Period
Every company and LLP must prepare annual accounts that report on their performance and activities during the financial year (unless exempt from audit). The period reported on in the accounts is called the accounting reference period.
For new companies/LLPs, the first accounting reference period starts on the day of incorporation and ends on the first accounting reference date. Subsequent accounting reference periods start on the day after the previous accounting reference period ended, and cease on the next accounting reference date (unless the company/LLP changes its accounting reference date).
Late Filing Penalties
Late filing penalties were introduced by Companies House to encourage the filing of accounts and reports on time, as this information is required for the public record. All companies and LLPs (unless exempt from audit) must send their accounts and reports to Companies House every year. If accounts and reports are filed late, the law imposes an automatic penalty. The period allowed for filing the accounts depends on whether the Company/LLP is filing its first accounts since incorporation or subsequent accounts.
If the company’s/LLP’s first accounts cover a period of more than 12 months, they must be delivered to Companies House within 21 months of the date of incorporation for private companies/LLPs (18 months for public companies), or 3 months from the accounting reference date, whichever is the longer (i.e. a private company/LLP incorporated on 1 January 2014 with an accounting reference date of 31 January has until midnight on 1 October 2015 (21 months from the date of incorporation) to deliver its accounts).
In subsequent years, a private company/LLP has 9 months from the end of the accounting reference period to deliver its accounts, and a public company has 6 months (i.e. a set of acceptable accounts for a private company/LLP for the accounting period ending 30 September 2013 would need to be delivered by 30 June 2014 to avoid a late filing penalty). However if the company/LLP changes its accounting reference period the filing time may be reduced.
How much are late penalties?
The level of the penalty depends on how late the accounts reach Companies House – it ranges from £150-£1,500 for private companies/LLPs, and from £750-£7,500 for public companies.
If you are a director of a company or the designated member of a LLP you are personally responsible for ensuring you deliver your accounts before the time allowed runs out. Delivery means actual receipt at Companies House in the correct format.
Do late penalties apply to any other documents to be filed?
No – the penalties only apply to the late filing of accounts
To appeal successfully against a penalty, a company/LLP would need to prove that the circumstances which justify the late filing of its accounts are exceptional. An example of this would be that there was a fire which destroyed all of the accounts a few days before the deadline. Companies House have stated that a high threshold must be met for an event to be classed as exceptional, and therefore the probability of an appeal being successful is limited.
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