News Item: Top Service News - Companies House Urge Companies to File Accounts Early
Companies House has called for company directors and accountants to file their annual accounts promptly to enable more time for the processing of accounts filed on paper for the 2019/20 financial year.
In a press statement issued by Companies House (19 Nov 2020) companies throughout the UK are being urged 'not to leave filing their annual accounts until the last minute and consider going paperless, as the disruption caused by coronavirus (COVID-19) continues to affect people's lives, businesses and the economy.'
Top Service director Emma Miller has the following advice: "During these unprecedented times it is important you allow extra time for the processing of your company accounts for your own peace of mind. As a director of a limited company you need to ensure that you are getting your company's annual accounts signed off well before the filing deadline. You then need to communicate with your accountant to ensure that the financial statements are being filed at least five working days before the filing date. Some accountants may be in a routine of 'just in time' filing so don’t assume that the accounts will be filed as soon as you've signed them off. Ask your accountant for a specific date that they will be filed and be aware that weekends and bank holidays will have an effect on when Companies House will actually upload the information to the system and pass it onto the credit reference agencies for analysis. Communication is key here."
Top Service has previously reported occasions when companies have filed their accounts at the last minute, for example, accounts are filed on the last day of the month which happens to be a Friday. It's a bank holiday weekend so Companies House doesn't actually upload the information until Tuesday, so the accounts didn't make the filing deadline and the credit reference computers may temporarily reduce the suggested credit limit to zero until the new accounts can be analysed. Most limited companies engage a firm of qualified accountants to prepare and file their financial statements and they may
routinely be filing very close to the deadline without considering the wider implications.
"This problem seems to apply to very large companies as well as smaller companies. We have seen companies with suggested credit limits of £10m whose accountant is filing on the very last day of their filing deadline and risking their client's credit limit temporarily being reduced to zero. The only answer is for company directors to take responsibility for when their information is actually being submitted to Companies House," says Emma Miller.
All UK limited companies are required to keep accounting records regardless of whether they are trading or not. Every year a limited company is required to file a set of accounts with Companies House, with the details of the information depending on the size of the company. Even non-trading companies must file 'dormant accounts' unless they have a special exemption. Private limited companies have nine months after their year end to file while public limited companies must file within six months. Credit reference agencies then use sophisticated computer programs to analyse this financial information and suggest a suitable credit limit but everything hinges on 'current financial information’' Once the filing deadline has passed the previous year's accounts are considered to be too old for analysis.
For further information and to read the full Companies House press statement please click here.