All private limited and public companies must file their accounts at Companies House in accordance with the provisions of the Companies Act 2006.
Small companies and micro-entities can prepare an abridged version of those accounts which has less detail by omitting certain balance sheet items. Qualifying dormant companies can deliver simpler annual accounts to Companies House.
2023 information is not available, however, more than 25,000 companies missed the deadline in September 2018 incurring a late filing penalty as a result. 30 September marks a deadline for many companies, and a total of 25,049 companies failed to meet this date for filing in 2018. Another 643 companies narrowly avoided a penalty, filing their accounts in the hour before the deadline. In total, 223,640 late filing penalties were handed out in 2018.
What are the time limits for filing company accounts?
Under the Companies Act 2006, the deadline for private companies to file their annual accounts is nine months from the end of the accounting reference period. A public company has six months. However, if you change the accounting reference period the filing time may be reduced.
If you are a director of the company, or designated member of the LLP – you are personally responsible for delivering your accounts before the time allowed runs out. Delivery means actual receipt at Companies House in the correct format. It does not matter if your filing deadline expires on a Sunday or Bank Holiday – you must still file your accounts by this date.
A civil penalty is automatically imposed if the accounts are late.
Filing first accounts
There are slightly different rules for filing a company’s first set of annual accounts
Private companies and LLPs
If your first accounts cover a period of more than 12 months, you must deliver them to Companies House within 21 months of the date of incorporation, or 3 months from the accounting reference date – whichever is longer.
Public companies
If your first accounts cover a period of more than 12 months, you must deliver them to Companies House within 18 months of the date of incorporation, or 3 months from the accounting reference date – whichever is longer.
Extending the time for delivering the accounts
Companies should take appropriate measures to ensure your accounts are filed on time. However, if there are particular reasons why the accounts might be filed late (such as an unforeseen event), you can apply for more time to file your accounts if the filing deadline has not passed. An extension will only be granted if the reasons are exceptional though.
What are the consequences of not filing accounts?
Not filing confirmation statements, annual returns or accounts is a criminal offence under section 451 of the Companies Act 2006 and directors or LLP designated members can be personally fined in the criminal courts.
If Companies House, choose to prosecute then the directors of that company will receive a summons/postal requisition to attend at Cardiff Magistrates Court to face criminal proceedings.
Thousands of company directors are prosecuted every year and it would appear that Companies House are taking a harsher stance. Previously, the maximum fine was £5,000 and prosecutions were rare, however prosecutions have become increasingly common in recent years.
Defences to Companies House prosecutions for not filing accounts
These prosecutions are difficult to defend because the offence of not filing accounts under section 451 of the Act is a strict liability offence. If accounts are not on time, then an offence is committed unless the director concerned can demonstrate that they ‘took all reasonable steps for securing that those requirements would be complied with before the end of that period.’
There is also a further defence if it appears that the director acted “honestly and reasonably and that having regard to all the circumstances of the case he ought fairly to be excused”, however both of these defences set a high threshold and are difficult to make out.
Therefore, it is only in exceptional circumstances that directors are able to successfully be found not guilty. In some cases, the most appropriate response is to admit the offence but submit a plea in mitigation in an effort to try and minimise the level of fine as much as possible.
However in some cases it may be possible to seek to persuade Companies House to discontinue proceedings.
Every case is different and the strategy will depend on the specific facts of the case and so it is important to seek legal advice at an early stage.
What are the criminal penalties for not filing companies accounts?
A director found guilty of an offence under this section is liable to an unlimited fine in addition to a daily default fine for continued contravention. The director is also left with a criminal record and if someone has more than one conviction, this can result disqualification proceedings being brought against the director to prevent them from acting as a director of a UK company.
Under the provisions for Directors Disqualification, three convictions for this offence could be looked at by the Magistrates for consideration of disqualification as a director.
If you have further accounts which are late you need to be careful because you may end up at some stage facing a submission to disqualify. If disqualified you can no longer act as a director, albeit it might be possible with permission from the Secretary of State to be a director of one company.
The criminal record itself has practical consequences, for example it will have to be declared when travelling to certain countries and could be disclosed on certain DBS checks/vetting. Conviction for this offence has serious consequences for those who wish to travel to America either for business or pleasure. The consequences are particularly draconian for individuals who are directors of companies in the United States. The consequences of conviction could therefore be totally disproportionate and unanticipated by those behind the original legislation in the UK.
Any criminal proceedings for not filing company accounts is separate from any civil late filing penalties issued by Companies House against the company.
Civil Penalties
The level of penalty depends on how late the accounts are and whether the company is public company or private.
The penalties are:
| Length of Period | Penalty for a Private company / LLP | Penalty for a public company |
|---|---|---|
| Not more than 1 month | £150 | £750 |
| More than 1 month but not more than 3 months | £375 | £1,500 |
| More than 3 months but not more than 6 months | £750 | £3,000 |
| More than 6 months | £1,500 | £7,500 |
If I plead guilty or am found guilty, is this a criminal conviction?
Yes. Companies House prosecutions are criminal convictions and will in certain circumstances need to be declared. If you have received a summons issued by Companies House, you should contact Olliers for advice to discuss how best to deal with the matter.Types of cases Olliers can help with:
- Directors being prosecuted for not filing accounts or for filing accounts many months after they were due to be filed;
- Accountants failing to file accounts;
- Accounts could not be prepared
- Directors have been convicted previously and facing new charges;
- Directors being prosecuted after accounts had been filed, but filed late
- Directors requiring more time in which to finalise Accounts
- Directors having been convicted in their absence, for example because they did not know they were being prosecuted
