Covid-19 – Extension for filing of company accounts.
By Joanne Turner
The ongoing corona virus crisis has far-reaching implications beyond just those relating to the nation’s health. All businesses are having to come to terms with the impact of the unprecedented lockdown and what it means for them. Most are having to face a significant loss of trade, supply-chain interruptions, the furloughing of employees and uncertainty about what the future holds.
There is, however, some good news for those who operate their businesses via a limited company as Companies House recently announced that companies can apply for an automatic and immediate three-month extension of the time period to file their annual statutory accounts.
There was already a limited ability to apply to extend a deadline if a company was unable to file its accounts due to events outside of its control, such as an unexpected illness or if a fire had destroyed company records a few days before the filing deadline. However, such applications were considered on an individual basis and a favourable result was by no means guaranteed. However, the difficulties that the Covid crisis is causing for everyone, including Companies House itself, means that an extension will now automatically be given where a company is eligible and the online application process followed.
To be eligible for the extension, there are two conditions which must met:
- the company’s filing deadline must not already have passed; and
- it must not have already changed its accounting reference date to either extending the filing deadline, or shortened the reference period.
It is therefore imperative that a company acts before its filing deadline. If an application for an extension has not been made prior to the original filing date, an automatic penalty will still be imposed and it is only in very rare and extreme cases that such penalties are waived.
The accountant would typically already be in touch with a company’s directors if they had any concerns as to whether an existing filing deadline can be met in the current circumstances. However, any company director who is concerned should speak with the accountant without delay to discuss the situation and to ensure that if an extension is necessary the application is submitted in time so as to avoid any penalty. Applications are made via the Companies House website, where additional guidance on the process can also be found.