Avoid Late Filing Penalties from Companies House by Hugging you Accountant!

25th October 2007

As Companies House statistics are showing that more than 200,000 companies were fined for late filing of annual accounts in the 2004-2005 period, Kashflow has called for 25th October to be a “National Hug Your Accountant Day”. This light-hearted message was sent to several organisations including the Department for Business and Institute of Directors to highlight this serious message to SMEs and bring them closer to their accountants.

Urging SMEs and their accountants closer together would help them understand the pressures that they face. As small business owners develop an improved relationship with their accountants, the accountants will understand the entrepreneurial spirit of their clients and how they operate.

All companies within the UK are required by law to file their annual accounts to the Registrar of Companies at Companies House every year. If the annual accounts are received late at Companies House, then the Registrar will impose an automatic penalty. This late filing penalty system was introduced in 1992 so as to encourage directors to file their company’s annual accounts on time for the public record, Companies House will then file these documents and make them available to the public.

The MD of Kashflow stated:

“A large number of small business owners do not realise the importance of keeping accurate financial records until it is too late.”

This is a very serious message, especially to the SMEs, as the late filing penalty fee at Companies House can be very high – anything from £100 to £5000 – the kind of amount that can adversely affect cashflow within some companies.

Companies are allowed ample time to file their annual accounts into Companies House, this is ten months for limited companies and 7 months for public limited companies from their accounting reference date. Some companies are granted extensions to file their accounts into Companies House by delivering Form 244, this will give them an extension for 3 months.

If the annual accounts have not been received after 12 months, Companies House will inform the collection agents which could result in a county court judgement against the company. It is therefore crucial that SMEs, and in fact all companies, keep accurate financial records. To avoid being one of the thousands of companies that will be fined for late filing of annual accounts into Companies House, develop a close relationship with your accountants and always keep them informed of any financial changes.

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