Consequences of not filing your accounts by the due date
Here at the Chichester Accountants we want to keep busy business owners up to date with the latest developments and challenges that accounting brings. In our previous accounting blog we covered changes to the VAT flat rate scheme. This week we’re talking about the consequences of not filing your account by the due date.
Filing deadlines and late fines
Limited company accounts must be filed at Companies House within 9 months of the accounting reference date (basically the financial year end date). This means, if your financial year end was on the 31/10/2016 your accounts must has been filed by 31/7/2017. If this date is missed you will automatically get a rather annoying £150 fine. These fines can increase to up to £1,500 if you allow this situation to exceed 6 months (further details can be found on the government website).
Companies house will send three reminders over a two month period informing you (or your accountant) that a deadline has been missed. If Companies House does not receive a response from your business it will commence the process to strike off your company - in a nutshell your company will cease to exist.
Prior to October 2015 HMRC would object to companies being struck off in order to allow for the collection of outstanding corporation tax. However due to the new changes put in place HMRC may not have time to issue objections before a company is struck off (for more indepth information on this matter you can take a look at this www.accountingweb.co.uk article).
Why are we bringing this to your attention?
This blog is by no means meant as a scaremongering exercise, it’s to help you understand and prioritise the necessity for a timely return. More and more accountants are seeing companies being under threat of being struck off, and once this process has taken place there is a complicated and expensive process to work through. The worst outcome is that your company bank account will be frozen, with the crown being given the right to it.
Furthermore because it is such a faff to get your company back on the register it can become a very lengthy process. Before you know it in addition to the cost and stress of restoring your company you may also be faced with a hefty fine due to late corporation tax.
Time can go by very quickly and before you know it, as well as the cost and stress of restoring your company you may be in for a very hefty fine from Companies House and then again from HMRC because your Corporation Tax is late.
Just a reminder...
When is my corporation tax return due?
Your corporation tax return is due 1 year after your financial year end
When do I have to pay my corporation tax?
Your corporation tax should be paid 9 months and 1 day after the financial year end (it makes sense for your corporation tax return to be completed at the same time as your company accounts)
What happens if I pay my corporation tax is late?
If you pay your corporation tax late you will be charged interest (exact details can be found on the government website).
Insider advice from an accountant:
Even if you don’t have the funds to pay your corporation tax, don’t delay submission of your corporation tax return! Don’t be afraid to enter into dialogue with HMRC, they will look upon you much more favourably if you talk to them, demonstrating your intention and willingness to meet your taxation responsibilities rather than just ignore your letters. If for any reason you don’t feel confident liaising directly with HMRC most accountants will be willing to do so on your behalf.
We’re always here if you need us
If you need advice, guidance and support when it comes to your tax return get in touch on firstname.lastname@example.org or call 01243 532490.
This blog was written by Monica Jervis, small business owner, founder of the Chichester Accountants and qualified accountant. If you’ve got any questions don’t hesitate to get in contact on Twitter, Facebook or Google+.
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