Julia Irvine 27 Sep 2018 02:25pm

Worst excuses for late filing of accounts

Companies House has warned inefficient businesses that using, “I found my wife in the bath with my accountant”, as an excuse for failing to file their accounts on time will not work

Nor will “goats ate my accounts”, “pirates stole my accounts” or indeed, “a volcano erupted and prevented me from filing”.

They are all reasons businesses have given for late filing and have been selected as one of Companies House’s 2018 top outrageous excuses. Not surprisingly, all the companies were unsuccessful in their appeals against a late filing penalty.

The rest of the list included: “slugs ate my accounts”; “it was Valentine’s Day”; “my company was more successful than I thought that it would be, so I was too busy to file”; and “we delivered the accounts to the betting office next door to Companies House”.

In fact, says Nick Parker, senior enforcement manager at Companies House, there is very little excuse for failing to file on time.

“Companies and directors must be aware of their responsibility to file accounts with Companies House,” he stresses. “Companies can sign up to receive e-mail reminders, which can be sent to up to four e-mail addresses.

“There will always be unforeseen events that mean a company is unable to file accounts on time. In exceptional circumstances, companies can request an extension to the filing deadline. However, these requests must be received before the filing deadline.”

Recent Companies House statistics show that the number of penalties handed out for late filing has gone up by nearly 25% since 2014, from 161,902 then to 201,634 in 2017/18. Over the four years, the cost to business has increased from £76m to more than £85m.

This worries Michaela Johns, an SME adviser from Hampshire-based chartered accountants HWB. Although some of the rise in numbers can be put down to the recent boom in start-ups, she says, they also indicate that Companies House is stepping up its enforcement activity.

“This spells trouble for businesses that do not have their house in order and, particularly for SMEs, where directors are often having to juggle business growth and back-office administration,” she warns.

The rules relating to filing are strict and missed deadlines lead to late filing penalties being imposed. These range from £150 to £1,500 for private limited companies depending on the length of the delay, and £750 to £7,500 for public limited companies. Missed deadlines for two consecutive years can mean double the cost.

Meanwhile, the directors themselves can find themselves in court over failure to file company accounts and annual returns on time, facing fines of up to £5,000 plus a further charge of £500 a day for additional compliance delays.

Parker recommends electronic filing as the fastest and easiest way. The Companies House WebFiling service has in-built checks to ensure that all the relevant information is provided before a customer can submit, he points out. In addition, it will automatically confirm by email receipt of the accounts and their acceptance for filing.