Maldon Accountants, Trueman Brown, is a small firm of accountants who believe in keeping their clients up-to date with the latest developments.

One common theme were hear about from the directors of PRIVATE limited companies is that, for whatever reason, they are in danger of not meeting the deadline for filing their financial statements.

CONSEQUENCES OF LATE FILING OF ACCOUNTS

The penalty regime for the late filing of financial statements can be very draconian:-

Length Of Period That Accounts Are Overdue

Penalty – Private Company

Penalty – Public Company

Not more than one month £150 £750
Between one month and three months £375 £1,500
Between three and six months £750 £3,000
More than six months £1,500 £7,500

The penalty will be DOUBLED if the company files its financial statements late in TWO successive financial years.

These penalties are imposed automatically and will only be waived in exceptional circumstances.

FILING DEADLINES

In the first period of existence, the filing date for a private limited company is normally nine months after the anniversary of the date of incorporation.

If a private limited company was incorporated on 23rd June 2016 then the deadline for filing the first set of financial statements should be 23rd March 2018.

After the first year of existence, the normal filing deadline for private limited companies is 9 months after the end of the accounting period.

For example, companies with the year end date of 31st January are required to file their accounts by 31st October of the same calendar year.

If a private limited company, thinks that it will be late in filing their accounts, how can they get extra time to file those accounts?

APPLYING TO COMPANIES HOUSE FOR AN EXTENSION

The company could apply to Companies House for an extension to the due date if “there has been an unforeseen event which was outside the control of the company”.

In practice, it will be very difficult to meet the definition of an “unforeseen event”. Compiling the records late or your accountant is too busy to complete the task will NOT meet the Companies House criteria.

EXTENDING THE ACCOUNTING REFERENCE DATE

As long as the deadline has not yet passed, if the private limited company is not going to meet it filing deadline then it will get an extension by changing its accounting reference date,

In the first year of existence, if a company’s accounting period is longer than one year, the latest filing date is 21 months from the date of incorporation, or 3 months from the end of the new accounting period, whichever comes later.

After the first year of existence, if the company extended the accounting period then the filing deadline is 9 months after the end of the new accounting period.

For example, companies with the year end date of 31st January extended their accounting period to 28th February are required to file their accounts by 30th November of the same calendar year.

One problem – companies are normally only allowed to extend their accounting period once in every five years (there are very stringent exceptions to do otherwise).

SHORTENING THE ACCOUNTING REFERENCE DATE

As long as the deadline has not passed, the company could shorten the accounting period. Importantly, there is no restriction in the number of times that company can do so!

The filing deadline becomes either nine months after the end of the new accounting period or three months after the date Companies House are informed of the change whichever is LATER.

Example – ABC Limited has not yet filed its accounts for the year ended 31st March 2016 which are due to be filed at Companies House on 31st December 2016. On 24th December 2016, the director of ABC Limited notifies Companies House that it will shorten its accounting reference date to 30th December 2016. The filing deadline is now 24th March 2017 (i,e, three months after Companies House are notified of the shortened date).

MAGIC SOLUTION?

It appears that companies have a magic solution to extend their filing deadlines by shortening the accounting reference date.

However, this solution should only be used in an emergency because credit agencies will reduce the credit rating of the company if it continually files its accounts past the normal deadline.

Maldon Accountants, Trueman Brown, can help you with this and any other matters. If you need any assistance, then please contact us.

 

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