Date: 25/03/2020 | Corporate & Commercial, Business & Professional Services
In the overall circumstances of the current crisis this may seem unimportant – but late filing of accounts will affect a company’s credit rating and can trigger events of default under loan agreements, allowing the lender to call up the debt.
Under normal circumstances, companies that file accounts late are issued with an automatic penalty.
In response, a joint initiative between the government and Companies House provides that from 25 March 2020, businesses will be able to apply to Companies House for a 3-month extension for filing their accounts.
Subject to some exceptions, companies must file their annual accounts within 9 months of their accounting reference date. Therefore, the ability to apply for an extension may currently be of particular interest to companies with a financial year end of June to November, who are due to file accounts in the coming months.
How to Apply
Companies will be required to apply for the 3-month extension to be granted. However, those citing issues around COVID-19 or health as grounds for the application will be automatically and immediately granted an extension.
Applications can be made through a fast-tracked online system which will take up to 15 minutes to complete.
Things to Note
An application must be made before the company's filing deadline. If a company does not apply for an extension and files its accounts late, an automatic penalty will still be imposed.
Companies that have already extended their filing deadline, or shortened their accounting reference period, may not be eligible for an extension.
Companies House will keep this new policy under review and amend it as necessary in light of the progress of the COVID-19 pandemic.
Links to Further Information and Guidance:
Keep your organisation up to date with the latest opportunities and changes in commercial law with regular insight and updates from the experts at Davidson Chalmers Stewart.