How to avoid penalties for late accounts

The deadline for filing your accounts with Companies House is just days away and your accountant has fallen ill. There’s no chance of the figures being finalised in time so how can you avoid being fined?

Late filing penalties

Companies House (CH) is notoriously inflexible over deadlines for submitting accounts. It will issue a fine if you’re only a day late and won’t waive these where a key individual, e.g. your accountant, has suddenly fallen seriously ill or even died. Directors and company advisors have been complaining about CH’s unfair attitude for years, but there’s no sign of it budging.

How much are the penalties?

Companies (apart from public companies) must submit their accounts within nine months of the end of their accounting period. Penalties start at £150 if you’re between a day and a month late and rise to £1,500 if you’re more than six months late. What’s more, if your accounts are late two years in a row the penalties for the second year will be double the figures above.

Extended deadline

There’s some evidence that if you contact CH as soon as you think your accounts are at risk of being late you can prevent trouble.

Tip. CH can extend the time allowed for submitting accounts, but you must ask for this before the original deadline. CH seems to be slightly more amenable to extending a deadline than waiving penalties after they have been charged. You might therefore be able to buy more time if your accountant suddenly falls ill.

File and amend

CH, unlike HMRC, doesn’t review the accounts for accuracy. Its role is simply to check that the accounts include the necessary directors’ statements – these are mostly standard and can be copied from CH’s website – and if they were submitted in paper format, that they are signed.

Tip. While you shouldn’t just dream up figures, you can estimate them so you can file accounts on time. Using CH’s online filing system makes this relatively simple because it provides you with a stencil on which to enter the figures. You can also choose which directors’ statements to include in just a couple of mouse-clicks. You can later submit amended accounts if you need to. There’s no time limit for this, but it’s advisable to send them as soon as you can.

Change your accounting date

If CH refuses to extend the filing deadline for your accounts and you’re not comfortable with preparing and submitting estimated figures, there’s one last option open to you that can save you from a penalty.

Tip. As a last resort you can change your company’s accounting year. You can extend it by up to six months. The new deadline will be nine months from the end of the new accounting date. As with applying for an extension to the filing deadline, a change of accounting period must be notified to CH before the original filing deadline passes.

Contact Companies House before the deadline and ask for extra time. Alternatively, submit accounts with estimated figures and send amendments later. If neither of these options is practical, you can extend your company’s accounting period by up to six months; this will push back the filing deadline.