Q. In the past the accounts for my limited company have had to be filed with Companies House within 10 months of the accounting year end to which they related. My accounts are made up to 31st March each year and in the past I had until the 31st January of the following year to submit these. My accountant now informs me that the deadlines have changed and these need to be submitted by 31st December to avoid penalties. Is this correct? If so, when did these changes come into effect and do I need to be aware of any other issues?

A. The changes you mention are all part of the biggest piece of legislation to affect the running of incorporated businesses for 20 years – The Companies Act 2006. The changes bring the legislation up to date for modern business life and reflect the advances made in Information Technology.

The Act introduced so many changes that the Government had to phase the new legislation in over a two year period. One of the changes only now starting to affect businesses is the one you have highlighted, which reduces the time limit for filing accounts with Companies House. This means that you now have only 9 months from the business year end to submit accounts to Companies House. The new legislation affects the accounts of incorporated businesses for year ends on and after 6th April 2009.

Now this, in theory, still leaves a sufficient period of time to collate your records, send them to your accountant and have the accounts prepared and approved before submission to Companies House. All accountants are aware of these changes and will have rescheduled work commitments accordingly – assuming you let them have the records in good time!

However if you are one of those businesses that leaves the provision of records to accountants until the last minute then be aware of new harsher penalty regime introduced as part of the changes.

The new penalties are on a sliding scale and range from £150 for being one day to no more than a month late increasing up to £1500 if accounts are submitted more than six months late. In the past accountants could contact Companies House giving a reason for late submission and in some cases avoid the penalty. This approach is no longer to be tolerated by Companies House and late submission will result in a penalty being charged. These penalties are also due and payable within 30 days of charging and Companies House has debt collectors in place to pursue those who refuse to pay or ignore the charges. Cases are being taken to court and if a ruling is made against your business then this could affect your credit rating.

You should also be aware that Companies House is not the only Government department currently tightening up on filing date deadlines. H M Revenue & Customs (HMRC) are withdrawing a concession with effect from 31st March 2011 that currently allows businesses an extra 7 days after the due filing date of both Company Corporation Tax Returns and Annual PAYE Returns (forms P35 & P14) for submission without penalties being levied. This concession was originally introduced to allow for postal delays which HMRC no longer consider appropriate as these returns are submitted online. You can still apply for a penalty charge to be cancelled if you can demonstrate a reasonable excuse though “its lost in cyber space” may not be one.

More than ever it is essential to ensure your financial records are up to date and that you plan, in conjunction with your accountant, if appropriate a schedule of work to ensure you remain compliant at all times and avoid unnecessary penalties from any Government department.

TaxWise is available to help answer any tax queries. Just call the Advice Service on 01455 852555 and one of our specialists will be happy to help.