In the light of the current COVID-19 pandemic, and companies focusing their time on trying to keep their business afloat, Companies House has announced that businesses will be able to apply for a 3-month extension for filing their accounts.
Generally speaking, if a company is late in filing their accounts, Companies House will automatically issue a penalty notice and the later the accounts are filed after the deadline, the higher the amount of the penalty. Once issued, a late filing penalty can be appealed against. However an appeal will only be successful in very limited circumstances and companies wishing to appeal must:
- give a specific reason for not filing their accounts on time
- include all relevant details, such as dates and times
- prove the circumstances were out of the company’s control, for example a fire destroyed their records a few days before their accounts were due
This joint initiative between the Government and Companies House will mean businesses can prioritise managing the impact of COVID-19.
It is very important to note that companies will still however, have to apply for this extension as it does not come into effect automatically for all companies. Failing to apply in time means companies risk having their name struck off the register.
How long does it take for before a company is struck off for non-filing of accounts?
The procedure and timing of this is set out in section 1000 of the Companies Act 2006. This requires the Companies Registrar to send at least two formal letters to the company in default, and if no reply is received to either letter, publish a notice in the Gazette to inform the world at large that the company will be struck off two months after the date of that notice. The process usually takes around four months. A company has 14 days to respond to the first letter, failing which, the Registrar will, within 14 days send the second letter. 14 days after sending the second letter, the Registrar will in the absence of receiving a reply, publish a notice in the Gazette, two months after which, the Registrar can strike off the company.
How likely is a company to get an extension?
Companies House say that any company applying for an extension citing issues around COVID-19 will be automatically and immediately be granted an extension. Companies can apply through a fast-tracked online system which is stated to take just 15 minutes to complete.