It has now been 3 years since Companies House first published a list of the most unusual excuses given by companies for failing to send their Annual Accounts on time; and whilst HMRC have published an annual list of taxpayers’ bizarre excuses for filing SA Tax Returns late every year for nearly 10 years, Companies House appeared to have been content just to do it just the once, until now that is.
Late Filing Excuses: Background
A private limited company or LLP (Limited Liability Partnership) has 9 months from the end of its financial year end (known as the accounting reference date) to file its Annual Accounts with Companies House.
If it fails to do so, it will receive an automatic initial late filing penalty of £150. Penalties then increase dependent upon how late the accounts are filed (1 to 3 months £375, 3 to 6 months £750, over 6 months £1,500); plus, the penalty will be doubled if the accounts are filed late in 2 successive financial years.
Late Filing Excuses: What about the effects of Covid-19?
In April 2020, Companies House gave all companies and LLP’s an automatic 3-month extension to the normal 9 months because of the pandemic, but this is now coming to an end. However, if your company’s accounts filing deadline falls after 5th April 2021, you can still apply for a 3-month extension and providing your application includes issues around Covid-19, it is near certain that you’ll be granted an extension.
Late Filing: How big a problem is it?
The latest data from Companies House shows that thousands of penalties were handed out for the late filing of company and LLP accounts, with nearly 30,000 companies missing the deadline on 30th September 2020 alone (Sept 2020, is the last month for which data is available); with many more companies narrowly avoiding a penalty by filing their accounts in the final hours and this is despite having that extra 3 months to file.
The 30,000 penalties issued in September are on top of over a quarter of a million issued in the previous twelve months, with Companies House Senior Enforcement Manager, Ian Gronland commenting:
“September can be a busy time for many people. However, if you are a company director you should be aware of your responsibilities to file annual accounts with Companies House on time. Failure to do so will result in a late filing penalty. Filing electronically is easier and faster, and our digital services have in-built checks to ensure that any necessary information is provided before accounts can be submitted.”
So, what unusual excuses did companies come up with – This year’s list:
- Our Business did a lot of planning, but didn’t really do anything – (That probably means your company is dormant, but you still need to file dormant company accounts)
- Our finance director ran off with my wife, who was Company Secretary – (That is an issue for Relate, but not a valid reason for being late with your accounts)
- I was a huge fan of Kirk Douglas and was very upset when he died – (I’m afraid an extended period of mourning for an actor isn’t a valid excuse unless he’s your dad)
- I became pregnant got divorced and became a single mother and didn’t have the time – (Another issue for Relate or perhaps Gingerbread or both!)
- We were planning to move our company to Dublin, but it didn’t happen – (That’s a pity as not only have you been fined, but also, you’ve missed out on a Corporation Tax rate of 12½%)
- We didn’t realise until it was too late, that our annual accounts had to be prepared by a properly qualified accountant – (Cheapskate)
- Our Company Secretary left, and we couldn’t afford to replace him – (You’ll have a further problem with the fines then!)
- Our premises are old, and mildew destroyed much of our paperwork – (Did mildew affect your computer and bank data storage as well?)
- I resigned as a director and couldn’t sign the accounts as I was the sole director and only a director can sign the accounts – (I do love an excuse involving tautology)
And finally, in this year’s list of inventive excuses is my personal favourite with echoes of ‘Pirates of the Carribean’:
- I became crazy at the end of the year and didn’t know or care what my responsibilities were – (To quote Johnny Depp’s character Captain Jack Sparrow: “Crazy people don’t know they’re crazy. I know I’m crazy, therefore I’m not crazy, isn’t that crazy?” – which is pretty much lifted from Doc Daneeka’s quote to Yossarian in Catch-22)