More and more companies are being hit by hefty fines for falling down on their Companies House filing responsibilities – with HMRC netting nearly £100 million in the last financial year.
Now Ian Holder, partner in the Birmingham office of international accountancy firm Mazars, has urged them to improve their housekeeping and get company accounts in on time.
While the majority of fines are for late submission of accounts, fines can also be issued for late delivery of annual returns. Annual returns are designed to gather in company information including company secretary and directors, registered office address, shareholders and share capital.
The Companies House 2010/11 annual report revealed that late filing penalties totalled £99.4 million against £68.6 million the previous year.
“That is a staggering increase and is costing businesses dear,” said Mr Holder.
“Annual filing may seem an onerous and bureaucratic exercise. But it is important and companies ignore or overlook it at their peril. The problem may simply be an administrative failure but it is proving to be an expensive one.
“Anyone who does not understand their responsibilities should take advice from an expert.”
If documents are delivered late, Companies House also has the power to prosecute directors and secretaries. A conviction would mean a criminal record, and possibly a fine of up to £5,000.
If no return or accounts are filed at all, Companies House may also strike the company off the register. In which case, any assets become the property of the Crown.
Mr Holder said filing penalties for late submission of accounts ranged from £150 for a private company just one month over, £750 for a plc, to £1,500 and £7,500 respectively for going past six months.
In addition where there was a failure to comply with filing requirements in relation to the previous financial year, the penalty doubles.
He said: “Companies need to keep their eye on the ball. These are difficult economic times and firms can ill-afford to make such elementary mistakes. These are basic responsibilities and management should ensure they are not forgotten.”
During the year to March 31, Companies House prosecuted and convicted 1,904 directors for failure to file either an annual return or set of accounts on time.