Non-Compliant Companies Facing New Penalties
Head of Company Secretarial Services Vesna Sowden looks at the new financial penalties, introduced by the Registrar of Companies
25 November 2024 | Author: Vesna Sowden
Vesna Sowden looks at the new financial penalties, introduced by the Registrar of Companies for the late filing of confirmation statements, and the steps you can take to avoid receiving a penalty notice from Companies House for late filing.
Why is it relevant?
Under the new enforcement powers granted to the Registrar of Companies (Registrar) under the Economic Crime and Corporate Transparency Act 2023 (ECCTA), Companies House has recently introduced a financial penalty for the late filing of the confirmation statements.
Historically, financial penalty was imposed only for the late filing of accounts, but the Registrar had no power to enforce the timely filing of other documents via a penalty regime.
One of the Registrar’s new objectives under ECCTA is to ensure that any person who is required to deliver a document to the Registrar does so and that the requirements for proper delivery are complied with.
All companies, even if they are dormant, must submit the annual accounts and a confirmation statement to Companies House. Directors have the responsibility to ensure that these filings are submitted on time. The new enforcement powers allow the Registrar to move faster when imposing sanctions for non-compliance.
Who does it affect?
The new late filing penalty regime affects companies registered at Companies House and Limited Liability Partnerships (LLPs).
What do you need to know?
The current penalties for the late filing of accounts remain the same. They are unaffected by the new penalties regime.
How will the new penalties work in practice?
If the confirmation statement is not submitted by the filing deadline, the Registrar will issue a warning notice in writing to the directors of the company at the registered office address giving a deadline of at least 28 days for the confirmation statement to be submitted. The notice period countdown starts a day after the date of the notice letter.
During the 28-day notice period directors may make representations in writing to the Registrar explaining why they were unable to submit the confirmation statement on time. It is unlikely that written representations will result in a waiving of a penalty unless there was an event outside of the directors’ control that prevented the timely filing.
If the confirmation statement is filed before the end of the notice period, no penalty will be issued. However, if the filing is still outstanding at the end of the 28 days of the warning letter, the Registrar will issue the penalty notice.
How is the penalty amount determined?
The Registrar may issue a fixed penalty, a daily rate penalty or a combination of both, depending on the length of the period during which the offence continues. Financial penalties are introduced as an alternative to prosecution and their amounts are similar to those that may be imposed by a court as fines for the same offence. For serious breaches and criminal offences court prosecution may follow and result in imprisonment of directors.
In determining the penalty amount, the Registrar will be taking into account the seriousness of the offence and how many times the company has committed the same or similar offences in the last five years. Higher penalties will be imposed on persistent offenders.
Financial penalty amounts:
| Offence level | First offence | Second offence | Third offence | Fourth or more offence |
| Minor | £250 | £500 | £750 | £1,000 |
| Serious | £500 | £750 | £1,000 | £1,500 |
| Very serious | £750 | £1,000 | £1,500 | £2,000 |
Paying the penalty does not remove the requirement for the outstanding filing to be submitted.
The Registrar’s new power to impose a financial penalty on a person who has committed a relevant offence extends to all offences under the Companies Act 2006 (Act) other than the offences relating to Company Secretaries in Part 12, Resolutions and Meetings in Part 13 and Audit in Part 16 of the Act.
What should you do next?
If you receive a warning notice from Companies House, act on it without delay.
To avoid receiving a financial penalty, ensure that any changes to the company’s information are reported to the Registrar and that the outstanding confirmation statement is submitted within the 28-day deadline.
Our Company Secretarial team offers an annual compliance package which includes timely submission of the confirmation statement, and several other filings required to notify the Registrar of the changes to the company’s information. We monitor the updates at Companies House and the implementation timetable of the remaining ECCTA laws and advise our clients of any upcoming changes.
Contact us
If you would like to discuss the above matter, or to confirm how this impacts your company, please get in touch with your usual Blick Rothenberg contact, or Vesna Sowden using the details below or this form to see how we can assist with any future planning.
