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Practically speaking: pandemic prompts extra time for account filing

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Published: 20 Sep 2020

UK companies struggling with the impact of the COVID-19 pandemic have been given more time to file their accounts at Companies House

An automatic extension for filing deadlines is included in the Corporate Governance and Insolvency Act, which received Royal Assent on 25 June this year.

The Act affects public limited companies and Societas Europaea companies, while secondary legislation applies to private companies, partnerships and Scottish qualifying partnerships.

For accounts filing, normal deadlines have been extended by three months so, for example, a plc’s filing deadline changes from six to nine months (from the end of the relevant accounting period) and a private company’s deadline from nine to 12 months. The extension is automatic, and does not have to be applied for.

Sally Baker, Technical Manager at ICAEW’s Financial Reporting Faculty says: “This is particularly welcome. Companies have got a lot on their plate and an extra three months to prepare accounts can only help. With remote working, a number of things can take longer and people might, for example, have more trouble accessing records.”

The accounts filing extension applies to entities with year ends up to 5 April 2021, after which normal deadlines apply. It is important to note that the automatic extension relates to an entity’s original filing deadline. If an extension has already been applied for and agreed, the three months will not be added to the extended deadline.

Special rules for specific circumstances

Special rules apply if a company has shortened its accounting reference period, and for new companies submitting their first set of accounts. In the latter case, if the first set of accounts covered a period of 12 months or less, the deadline is extended by three months as for other companies. If the first accounting period covers more than 12 months, the deadline is extended to the longer of three months from the accounting reference date and 24 months from the date of incorporation if a private company (or 21 months if a plc).

Companies House has also said that it will treat late filing penalty appeals sympathetically if the late delivery of accounts was caused by the COVID-19 outbreak.

Deadlines for other filings at Companies House have also been extended. The deadline for filing a company’s confirmation statement has been extended from 14 days (from the end of the review period) to 42 days, and the deadline for event-driven filings (for example, recording a change in directorship) has also been extended to 42 days. The period allowed for the registration of a mortgage charge has also been increased, from 21 to 31 days.

The Corporate Governance and Insolvency Act also includes provisions for holding annual general meetings – for companies and other entities such as charities or building societies – during the current conditions. These are intended to ensure that companies and other bodies will be able to suspend shareholders’ and members’ ability to attend meetings in person, that they will be able to convene meetings in a flexible way using a range of technologies, and that they also allow for AGMs to be postponed.

What should companies be doing now? Baker advises: ‘You should work out a revised timetable for filing, setting new deadlines for your company’s reporting process and for the audit process. It will be important to engage with your auditors to ensure these are appropriate.’

Companies are, of course, able to stick to their original filing deadlines if they prefer, but for most organisations the extensions announced will be welcome during a challenging time for business.

The Financial Reporting Faculty provides an extensive range of practical guidance to its members on common financial reporting problems. Further resources can be found at icaew.com/financialreporting and at icaew.com/ukregulation.