November 11, 2024 Appealing a late filing penalty
In addition to managing the day-to-day success of the company, directors also have to ensure that certain legal duties are met. This includes the annual filing of company accounts. And whilst there are a few exceptional circumstances for which Companies House may grant an extension, in general accounts have to be filed on time.
Fines will be issued if the filing deadline is missed, leaving directors with the choice of paying the fine or appealing the penalty. The first appeal can be raised by phone, post, or e-mail but the preferred route is via an online appeal system. In the year to March 2024 46% of appeals were made electronically.
Should that first appeal be unsuccessful, there is an option to appeal again via the Senior Caseworker Unit at Companies House, followed by a final option to appeal via a centrally appointed independent adjudicator. There are five independent adjudicators who between them considered 338 appeals in the year to March 2024 with 126 further cases remaining outstanding at the end of the year.
Of the appeals considered, twenty-six were upheld. A report summarising the nature of the appeals was released at the beginning of November 2024. Some of the successful appeals related to problems with electronic filing, including temporary IT failures, whilst others related to incorrect or incomplete advice being provided by Companies House staff. A plea of exceptional circumstances was accepted in a few cases, including one instance where all directors separately had to deal with serious ill health either on their own part or that of near relatives.
In addition to reviewing the appeals, the independent adjudicators made a series of recommendations with a view to eliminating some of the misconceptions and errors which might result in late filing of accounts. These included:
- Changing the wording on reminders to clarify that some companies including LLPs are not able to file electronically.
- Clarifying the process for filing CIC accounts online.
- Reviewing the wording in respect of micro-entity accounts claiming exemption from the requirement for a profit and loss account.
In 2020 Companies House stopped sending out paper reminders about the need to file accounts. Companies were instead asked to register to receive e-mail reminders. Although to date 89% of companies have done so, in nearly 30% of late filing appeals seen by the adjudicators the company had not registered for reminders. Elemental’s annual company secretarial service not only includes holding statutory registers and preparing annual compliance statements but also other support including deadline reminders for accounts filing.
