Can I avoid a penalty for filing late accounts?

Limited Companies have to file a set of accounts every year at Companies House and HM Revenue & Customs. Failure to file your accounts in time will lead to a penalty being issued by Companies House.

Issuing penalties for late filing first started in 1992 to reduce the number of companies that filed their accounts late or did not submit any accounts. Since then the penalties have increased to encourage more directors to file the accounts on time.

Current penalties are-

Private Limited Company (LTD)

• Not more than 1 month £150
• More than 1 month but not more than 3 months £375
• More than 3 months but not more than 6 months £750
• More than 6 months £1,500

 Public Limited Company (PLC)

• Not more than 1 month £750
• More than 1 month but not more than 3 months £1,500
• More than 3 months but not more than 6 months £3,000
• More than 6 months £7,500

Can you avoid the penalty?

In most cases the answer is no. Under the Companies Act 2006 Directors have sufficient time to file a set of accounts. It is the company director’s responsibility to know when accounts are due and to file them on time.

You can appeal against a penalty but only under exceptional circumstances. Companies House state this would be an ‘unforeseen catastrophe’ and use the example of your accounts being destroyed in a fire just days before the filing date.

In the last 20 years we have not seen a company successfully avoid a penalty. The reality is that directors of a company have months to find an accountant, prepare the accounts correctly and submit them to Companies House.

You cannot appeal because your accountant was supposed to be submitting the accounts, you are based overseas, another director left the company, or because you filed incorrectly prepared accounts.

To avoid a penalty-

• Make sure you know when your accounts are due
• Diarise important filing dates
• Keep accurate records
• Use a reputable accountant
• Make sure accounts are prepared correctly
• Submit accounts on time
• File the documents online or post with secure delivery
• Check Companies House online to ensure the accounts are accepted and added to the public register

Remember, if you are a company director it is your responsibility to know when accounts are due and to ensure they are filed on time.