Accounts overdue and late filing penalties: the Companies House letters in order

If Companies House has written to say your company's accounts are overdue, two things are now true. A late filing penalty will be charged automatically when the accounts arrive, scaled by how late they are, from £150 to £1,500 for a private company, and doubled if last year's accounts were late too. And if the accounts are never filed, the directors are committing a criminal offence and the company can be struck off the register. The right move is to file the accounts now, pay the penalty when the notice comes, and only appeal if something exceptional stopped you filing. This guide sets out the letters in order, the penalty bands, appeals and what to do at each stage.

The deadline the letters are measuring from

A private company must deliver its accounts to Companies House within nine months of the end of its financial year. The first set is different: if the first accounts cover more than 12 months, they are due 21 months after incorporation. A public company has six months. The deadline is about receipt, not sending. GOV.UK says delivery means the accounts actually reach Companies House, in an acceptable format.

Companies House stopped sending paper reminders in November 2020. Reminders go by email only, to companies signed up to the email reminder service, which allows up to four addresses including an agent. No sign-up, no reminder.

Letter one: the overdue notice

Once the deadline has passed, Companies House writes to the registered office. The letter states that the accounts for the period ending on a given date have not been delivered, that failing to file is an offence, and that a penalty will be charged when the accounts arrive. Every month that passes moves the company into a higher band.

Letter two: the penalty notice

The penalty is charged when the late accounts are delivered, not when the deadline passes. GOV.UK says that if you deliver your accounts late, Companies House will automatically issue a penalty notice to the registered office address, setting out the penalty, how it was calculated and how to pay.

The bands for a private company or LLP, measured from the deadline to the date the accounts are received:

• Up to one month late: £150
• More than one month, up to three months: £375
• More than three months, up to six months: £750
• More than six months: £1,500

The penalty is doubled if accounts are filed late in two successive financial years. Last year's accounts a week late and this year's seven months late means £3,000, not £1,500.

Letter three: the Gazette

If the accounts are never filed, the strike-off process starts, because the registrar treats missing accounts as evidence that the company is not carrying on business. Companies House writes to the registered office asking whether the company is still operating. If there is no reply and nothing is filed, it publishes a notice in the Gazette and can strike the company off not less than two months after that notice. A further Gazette notice then records that the company is dissolved. Its bank account is frozen and any money in it passes to the Crown. Filing the overdue accounts and confirmation statement before the date in the notice stops the action. We cover the Gazette notice in a separate guide.

The offence, which is separate from the penalty

The late filing penalty is a civil penalty charged to the company. Not filing accounts at all is a criminal offence. GOV.UK is explicit that directors or designated members could be personally fined in the criminal courts, and that this is separate from and in addition to any late filing penalty. A company that never files exposes its directors to prosecution as well.

Appeals: when they work and when they do not

You can appeal, but GOV.UK says the registrar has very limited discretion and an appeal will only succeed where the circumstances are exceptional, for example a fire destroying the records a few days before the deadline.

GOV.UK lists reasons that, on their own, are unlikely to succeed:

• the company is dormant
• you cannot afford to pay
• your accountant was ill, or you relied on your accountant
• these are your first accounts
• you are unfamiliar with the filing requirements
• the company or its directors are in financial difficulty, including bankruptcy
• the accounts were delayed or lost in the post
• the directors live or travel overseas
• another director was responsible for the accounts

If you do have exceptional grounds, appeal through the Companies House online appeal service, giving dates, times and evidence. Companies House will not collect the penalty while it considers the appeal. If the appeal is rejected, you can write to the Senior Casework Unit in the Late Filing Penalties department, and if that unit upholds the penalty you can ask the independent adjudicators to review the case, although they cannot force the registrar to cancel it.

Paying, instalments and what happens if you do not

Penalties arising on or after 30 March 2020 can usually be paid online through the "Pay a penalty to Companies House" service, using the reference on the notice. If you cannot pay in one go, write to Companies House, explain why, and ask for instalments. GOV.UK says monthly instalments over a short period are normally accepted.

Unpaid penalties are referred to debt collection agencies and then to the registrar's solicitors, and the claim goes to the County Court or, in Scotland, the Sheriff Court, where legal costs can be added.

HMRC runs its own clock

Corporation Tax is due nine months and one day after the end of the accounting period, and the Company Tax Return 12 months after. HMRC's late return penalties are £200 on day one, another £200 at three months, then 10% of the unpaid tax at six months and another 10% at 12 months. Three late returns in a row raise the £200 penalties to £1,000 each. Filing the Companies House accounts does not file the tax return.

What to do today

1. Check the accounts due date on the filing history, so you know which band you are in.
2. Get the accounts finished and filed online. Near a band boundary, a few days matter.
3. Make sure every director has verified their identity, because the next confirmation statement cannot be filed without each director's Companies House personal code. One Login is the free route; an ACSP such as Vaulex Group is the route when One Login cannot be used.
4. When the penalty notice arrives, pay it or ask for instalments. Appeal only if the circumstances were exceptional.
5. Sign up for email reminders, with your accountant as one of the addresses.

Stop the next one being missed

Late accounts are usually a mail problem before they are an accounting problem: the overdue letter went to a registered office nobody checks. Companies that move their registered office to Vaulex Group have every letter scanned into the Mailroom the day it reaches Vaulex House, sorted into folders with Companies House and HMRC mail kept separate, and their accountant given gated access to just those folders. The overdue notice is in front of the person who can act on it the same day.

This guide is general information about Companies House and HMRC filing rules, not legal or tax advice.

Start when you are ready

Move your registered office to Vaulex House through the Switch at https://vaulex.co.uk/switch/, and every Companies House and HMRC letter from then on is scanned the day it arrives. To see whether a director still needs to verify before your next confirmation statement, run the free checker at https://guides.vaulex.co.uk/am-i-affected ("Check my company").