Many small business owners and key members of their finance teams have been suffering from long-term health issues or trapped overseas due to the pandemic.
As a result, many privately-owned businesses missed the filing deadline for their financial statements, leading to penalties of between £150 and £7,500, which are doubled if the filings are late for two consecutive years in a row.
It is possible to appeal the penalties in exceptional circumstances like the pandemic, but it is taking Companies House as long as six months to respond.
Ultimately, it is for the Companies House Registrar to determine what constitutes an exceptional circumstance and whether or not each appeal is allowed. However, it appears that when responses are eventually received, appeals have been generically rejected without regard to the difficulties faced by the business. When this is challenged, it is passed to another department for further review adding to the prolonged delay and uncertainty.
In the meantime, we are finding that some penalties have been passed on by Companies House to debt collectors before everything has been concluded. This is the last thing that such business owners need when they are already under financial strain, still waiting to hear the outcome from Companies House and just fighting to survive.
Despite Companies House giving three-month Covid filing deadline extensions, this has often not been enough for businesses faced with unprecedented extenuating circumstances outside of their control. Whilst the three-month extension is not unreasonable and has been very gratefully received, it is ironic that in some cases it is taking Companies House as long as double this time to address late filing penalty appeals, which would ordinarily be concluded within 30 days.
Would you like to know more?
If you would like to discuss the above or how it may affect you and your business, please get in touch with your usual Blick Rothenberg contact or Marc Levy using the details on this page.
For press enquiries, please contact David Barzilay.