One of the many practical issues that has arisen as a result of COVID-19 is the difficulty that some companies are facing in filing their accounts in time.
A company has nine months from its year end in which to file its annual financial statements at Companies House. This applies to all companies: whether limited by shares or guarantee; whether commercial of charitable companies; and it includes community interest companies (CICs). It also extends to limited liability partnerships (LLPS).
Failure to file accounts on time will result in an automatic penalty. It is also a criminal offence by every director of the company. In addition, it is likely to be a breach of loan facility and other funding agreements.
The Government has made clear that delays in the preparation and filing of accounts caused by the COVID-19 pandemic may be used as reason for an application to extend the accounts filing deadline. It is possible to apply to extend the accounts filing deadline, provided such an application is submitted before the deadline. The application may be made online or by post in such circumstances and, if successful, will allow further time for preparation and filing of accounts.
If the application for extension is not submitted and accounts are filed late, an automatic penalty will be imposed. It is therefore essential that any application for extension is made before the accounts filing deadline. Companies House shows, on the Overview page of each company, when the next set of accounts has to be filed.