Last 3 or 4 years have drastically affected small businesses in the UK. For this reason, many are unable to file their taxes on time. To make the process easy, HMRC has offered a delay for certain filings and appeals. However, there are still a lot of other dates and penalties that remain the same.
Consequently, many companies are toiling to meet the deadlines each year. In this short blog, we’ll discuss how to appeal against Companies House late filing penalties.
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Companies House Late Filing Penalties:
As a company, you need to file your annual accounts at the Companies House. If you’re unable to meet the deadlines, you’ll be charged a penalty automatically.
The timeline to file your company’s accounts depends on whether you’re filing them for the first time or if they are your subsequent account filings.
If you’re a private company owner and your first accounts cover more than a year, you need to send them to the Companies House within 21 months of registration or three months from your accounting reference date, whichever takes more time.
After the first year, a company is obliged to file within nine months of its year-end (accounting reference period).
The penalties for late filing start from £150 to a whopping £7500 based on the period. These penalties will be doubled if a company files its accounts late for two consecutive years. The following table will show you Companies House’s annual late filing penalties:
| Length of period (measured from the date the accounts are due) | Penalty for a private company or LLP | Penalty for a public company |
|---|---|---|
| Not more than 1 month | £150 | £750 |
| More than 1 month but not more than 3 months | £375 | £1,500 |
| More than 3 months but not more than 6 months | £750 | £3,000 |
| More than 6 months | £1,500 | £7,500 |
If you face any exceptional or unforeseen event, you can ask the Companies House for a delay before the deadline.
How to Appeal Against Late Filings Penalties?
Contrary to other types of penalties that the government charges, like tax penalties, you can’t find a tribunal to appeal for late filing on accounts, even if you have a solid reason for it. As per the law, you can’t avoid the penalty if you miss the deadline. The only way to appeal to CH to avoid a late penalty is to ask it to use its limited discretion to exempt the penalty.
Senseless Arguments that are not Acceptable:
As per the law, Companies House is not allowed to consider a few arguments, no matter how well they are presented. The common reasons for delay include postal disruption, dependence on the accountant for filings, sudden illness, or even the demise of a director responsible for filing accounts.
Here are a few tips to follow for appealing against late filing penalties:
1. You should first read the late filings appeal manual, published by the CH, to find out the ineligible reasons for appeals. We recommend that you read this manual beforehand to save time and money. If your reason is ineligible for the appeal, you should warmly accept it instead of wasting your valuable time and effort on sending the appeal. If your reason is not listed on the ineligible list, you should appeal.
2. The manual contains some scenarios where your appeal would be accepted, like a significant computer breakdown within five working days of the date of the filing.
3. If your appeal is rejected by the CH, you don’t need to be worried. There are two options available for you to take. The first one is contacting the Senior Casework Unit (SCU) at CH to assess your case. Second, you can ask Independent Adjudicators of CH to review your case to see if SCU at CH upholds the penalty.
Inactive Company:
If your company is dormant or inactive and you have received a penalty notice from the CH, you can avoid the penalty. You just need to apply to a company struck off to dodge the penalty.
Quick Sum Up:
So, you have understood the process to appeal against companies ‘ late filing penalties. You can appeal here online by using the government website. Remember that after receiving the penalty notice, you need to appeal within 30 days. If your business is affected by the pandemic, you can visit the government website for more information.
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Disclaimer: All the information provided in this article on How to Appeal Against Companies House Late Filing Penalties? including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.
