A recent news article highlighted that Twitter UK Ltd and TweetDeck Ltd have been hit with automatic late filing penalties by Companies House – the Company’s Registrar in the UK. However that doesn’t mean they have actually been fined, nor that they will pay them.
From experience, we have seen many companies formed and registered at Companies House – as every Branch/foreign company and Limited company should be, but when UK compliance isn’t adhered to, the company (providing it has no intention of continuing to trade under that name), can simply dissolve the company – and walk away from their debts, and simply start again in the UK under a different name.
While some companies may not be able to pay debts, or file late accounts due to inadequate internal processes, or quite simply business may be slow, or have ceased due to economic growth – is it right that companies can use this opportunity to close their business, walk away from their debts, responsibilities, and statutory duties and simply start again, with the same directorships, trading activities, but under a different name?
Are we really operating in a society that allows this? Unfortunately, yes.
Yes the UK is open for business – and is a wonderful envinromment to work in, but companies, whether UK or overseas parent owned should not be able to exploit the rules such that British Tax Payers have to compensate for them as a result.
Rant over.
Here’s the late filing details as a summary:-
| Length of delay, based on the filing date | Private company | Public company |
| Not more than one month | £150 | £750 |
| More than one month but not more than three months | £375 | £1,500 |
| More than three months but not more than six months | £750 | £3,000 |
| More than six months | £1,500 | £7,500 |
These rates double for any company, which files late having also filed late in the previous year. In this circumstance that results in a maximum fine of £15,000 for a PLC filing more than six months after the filing deadline.
The Registrar of Companies automatically issues invoices where accounts are filed late – these are sent to the registered office.
Can a filing penalty be appealed against?
You may appeal against a penalty but it will only be successful if you can show that the circumstances are exceptional. The Registrar has limited discretion not to collect a penalty. It may be applied when an unforeseen catastrophe strikes a company at a critical time; for instance, a personal tragedy affecting a sole director immediately before a filing deadline or a fire destroying records a few days before time runs out.
The Registrar lists the following reasons that are not considered exceptional:
- My accounts were delayed or lost in the post
- My company is dormant
- My company or its officers have financial difficulties (including bankruptcy)
- I cannot afford to pay
- You did receive them on time but they were rejected
- Another director is responsible for preparing the accounts
- My accountant was ill
- I relied on my accountant
- These are my first accounts
- I am not familiar with the filing requirements
- I was abroad on business or on holiday
- I am a sole director
- I did not receive a reminder notice
- My dog ate them (made this one up, but wouldn’t be acceptable)
But – these fines are only payable once a company has filed its late accounts. If they are never filed, then no late filing penalty is assessed or paid.
In the case of Twitter and TweetDeck we have no reason to suggest that they will not file their Accounts eventually, but when they do they are unlikely to avoid the fines then imposed on those companies.
For further information about filing accounts in the UK, and responsibilities as a director in the UK, please contact us for further specific information.
Tags: business in the UK, Regulations, setup business in the UK, UK Accounting firm, UK Law
