Companies House: Your Obligations
Companies House has recently released its statistics for the year ending 31 March 2011. The data shows that over 220,000 penalties were issued for the late filing of accounts in Great Britain during the year ended 31 March 2011. This amounted to a staggering £90m of fines issued by Companies House.
In these challenging times, businesses really ought to be using their cash and resources as effectively as possible, and thus should be avoiding incurring late filing penalties- especially given that Companies House can now levy eye-watering penalties of up to £3,000 for the late filing of accounts.
In a statement today Companies House commented "It is essential that companies file accounts and annual returns on time with Companies House. In fact the majority of companies do comply, ensuring that up-to-date corporate information is available for UK business and the public to use.
However, non-compliant companies not only face penalties for late filing, but possible prosecution, risk a poor credit rating with the loss of potential customers.
The year up until 31 March 2011, Companies House prosecuted and convicted 1,904 directors for failure to file, either an annual return or set of accounts on time with Companies House".
So what are the annual obligations of the typical Limited company, and what can directors do to avoid missing these deadlines?
Annual return (form AR01)
An annual return is a snapshot of general information about a company's directors, secretary (where one has been appointed), registered office address, shareholders and share capital. The return covers the first twelve months from incorporation and is ‘made up to’ the anniversary every year thereafter.
You have 28 days from each anniversary to submit the return to Companies House. There is a filing fee of £14 for electronic filing and £40 for paper submission.
Whilst it seems like a fairly trivial form and can get overlooked, it is a criminal offence not file the return and directors, company secretaries and the company may be fined and prosecuted for late delivery.
Accounts
Most small companies will qualify for reduced disclosure in their accounts, and therefore the accounts that are filed at Companies House, often only show a balance sheet and some notes (‘abbreviated accounts’).
The first set of accounts will need to be filed with Companies House within 21 months of the date of incorporation. Thereafter, they will need to be filed within 9 months of the ‘accounting reference date’ (effectively the company’s year end), unless the accounting reference date is subsequently changed.
There is no fee for filing the accounts.
Corporation tax
Soon after a company is set up, HM Revenue & Customs (HMRC) should send a form called New Company Details (form CT41G) to the registered office. This form must be completed and returned to HMRC within three months of the start of trade, so that HMRC know when the company will be liable for corporation tax.
The company will then need to pay any corporation tax it owes to HMRC within nine months and one day from the accounting reference date.
Corporation tax return (form CT600)
And finally, the company will also need to submit its corporation tax return to HMRC. This is due twelve months after the accounting reference date. There is no filing fee for this either.
Please note that any change in the company’s accounting reference date, can affect some of these deadlines. Furthermore, the rules for Scottish companies and PLCs may vary from the above. The filing and tax obligations for VAT registrations and Employer’s Schemes have been ignored.
Tips to avoid missing corporate deadlines
- Abbreviated accounts
If your company fits the criteria, make sure you take advantage of filing ‘abbreviated accounts’ with Companies House. Firstly, they are simpler and therefore quicker to prepare. And secondly, it keeps the information about your company available to the public, to a minimum.
- Always double-check!
Never assume you know the deadlines. Always check correspondence from HMRC and Companies House- or alternatively, review the details held on their website if you have access.
- Diary/ calendar
This should be obvious, but always make a note in your diary and calendar of all the deadlines.
- Up-to-date bookkeeping
Keeping your bookkeeping records is a must in these difficult times! It helps you monitor the business’ profitability which in turn helps you make decisions and identify cashflow problems sooner. Up-to-date records should also reduce the risk of missing deadlines, because the figures are ready to be plugged into the relevant return/ accounts.
- Put aside
Once you know what the company’s corporation tax liability is, start putting money aside each month. Also, don’t forget that there may be tax liabilities for the directors/ shareholders, and whilst these aren’t the responsibility of the company, theymay want to get the cash to cover these debts out of the company.
- eReminders
Paper reminders are issued by Companies House and HMRC, but these can be delayed or obstructed by the postal system.
However, Companies House has just launched an eReminder service, which offers a timely email reminder of when your accounts and annual returns are due at Companies House. Plus you have the option of up to four email addresses per company.
- Get help
If the above all sounds a bit daunting, then seek the professional advice of your local TaxAssist Accountant. They can prepare all of the returns and accounts (for the company and any officers), and will liaise with Companies House and HMRC on your behalf.
Posted by Thomas Fletcher
How we can help
We have a whole range of accountancy services specifically tailored for Limited Companies.
TaxAssist Accountants can help you take advantage of the most beneficial tax arrangements available to you and make sensible choices about minimising your commercial risks. Call us today to find out more.
Help and Advice
Contact us now so we can discuss your requirements; call us on: 0800 0523 555 Or fill in our Contact form and we will call you back.
