Changing a company’s year end date

There are specific rules that restrict changing a company’s year-end date, also known as the "accounting reference date". Initially, this is based on the date of incorporation. Under certain conditions, it’s possible to adjust the accounting year-end, which may offer trading or tax advantages for some businesses.

You can generally change the year-end for the current financial year or the one immediately preceding it. Altering the year-end will also adjust the deadline for filing accounts, except during a new company’s first financial year.

You can shorten the year-end date an unlimited number of times, but you can only extend it once every five years, with a maximum extension of 18 months. Extensions may occur more frequently under specific circumstances, such as if the company is in administration.

To request a change to an accounting reference date, you can use the Companies House online service for a quicker process or submit a postal version of the Change of Accounting Reference Date (AA01) form. Changes cannot be made for periods where accounts are overdue.

While there is no definitive reason to choose one date over another, various factors should be considered. The most common year-end dates are typically 31 December (to align with the calendar year) or 31 March (to align with the tax year).

Additionally, the Companies House rules stipulate that the year-end cannot be changed for any period where the accounts are overdue .

Source:Companies House| 21-10-2024

Is there a partnership in place?

A partnership is a reasonably straightforward way for two or more legal persons to establish and operate a business with the intent to make a profit. Partnerships can take various forms, and legal entities other than individuals can also be partners.

There are two main types of partnerships: the traditional partnership, involving two or more partners, and the more complex limited liability partnership (LLP), which offers the benefit of limited liability, similar to that of a company.

HMRC’s guidance clarifies that a partnership can exist without a written agreement, with a later written agreement simply formalising an existing oral agreement. In such cases, the partnership's formation date is when the terms of the oral agreement were first implemented. However, if a written agreement establishes a new partnership, where none previously existed, it is only effective from the date it is executed and implemented, with no retrospective effect.

HMRC's internal guidance for determining the existence of a partnership advises its officers that… it is important that you establish all of the facts to determine the true relationship between the parties. This will include finding out what the intentions of the parties were. No single factor is likely to be conclusive on its own. You will need to form an overall view, based on all the facts and evidence.

Source:HM Revenue & Customs| 16-09-2024

What is a PSC?

PSC stands for Person with Significant Control. It is a legal term used primarily in the United Kingdom under company law. A PSC is someone who holds significant influence or control over a company. Companies in the UK are required to identify and register their PSCs with Companies House to ensure transparency about who owns and controls companies.

A person can be classified as a PSC if they meet one or more of the following criteria:

  1. Holding more than 25% of shares in the company.
  2. Holding more than 25% of voting rights in the company.
  3. Having the right to appoint or remove the majority of the board of directors.
  4. Exercising significant influence or control over the company.
  5. Having control over a trust or firm that meets any of the above conditions.

This register of PSCs helps combat issues like money laundering and tax evasion, ensuring there is transparency in company ownership and control.

PSC Register Requirements

Every UK company (unless exempt) is required to maintain a PSC Register and submit it to Companies House. This register must be kept up-to-date and include information on all PSCs. The process ensures transparency in company ownership and helps regulators, and the public, understand who controls UK companies.

Information Required for the PSC Register

For each person or legal entity classified as a PSC, the following details must be recorded:

  1. Full name
  2. Date of birth
  3. Nationality
  4. Country of residence
  5. Service address (this can be different from their residential address)
  6. Residential address (this is not made public)
  7. The date they became a PSC
  8. Which of the PSC conditions they meet (e.g., holding over 25% of shares)
  9. Details of any significant influence or control they have over the company
Source:Other| 16-09-2024

Penalties for late filing of company accounts

There are late filing penalties which are designed to encourage companies to file their accounts and reports on time. All companies, private and public, large or small, trading or non-trading must send their accounts to Companies House. A penalty is automatically imposed by Companies House if the accounts are late.

The table of penalties for late submission is as follows:

How late are the accounts delivered

 Penalty – Private Company

Penalty – PLC

Not more than one month

£150

£750

More than one month but not more than three months

£375

£1,500

More than three months but not more than six months

£750

£3,000

More than six months

£1,500

£7,500

Failure to file confirmation statements or accounts is a criminal offence which could result in the directors being personally fined in the criminal courts. Late penalties which are unpaid will be referred to collection agents and could result in a County Court judgement or a Sheriff Court decree against the company.

It is possible to appeal against a penalty, but it will only be successful if the appellant is able to demonstrate that the circumstances of the late filing were exceptional, for example, a fire destroying records a few days before the filing deadline.

According to Companies House guidance, an appeal is unlikely to be successful if it’s based on the following examples:

  • your company is dormant
  • you cannot afford to pay
  • your accountant was ill
  • you relied on your accountant
  • these are your first accounts
  • you are not familiar with the filing requirements
  • your company or its directors have financial difficulties (including bankruptcy)
  • your accounts were delayed or lost in the post
  • the directors or LLP members live (or were travelling) overseas
  • another director or LLP member is responsible for preparing the accounts.
Source:Companies House| 02-09-2024

What is an appropriate address for a company?

One of the key changes introduced as part of the Economic Crime and Corporate Transparency Act (ECCTA) was the introduction of new rules for registered office addresses. The ECCTA introduced new statutory objectives for the Registrar of Companies which they must promote when performing their functions. The changes took effect from 4 March 2024.

Under the new rules registered office addresses companies must, at all times, have an ‘appropriate address’ as their registered office.

An address is an ‘appropriate address’ if, in the ordinary course of events:

  • a document addressed to the company, and delivered there by hand or by post, would be expected to come to the attention of a person acting on behalf of the company; and
  • the delivery of documents there is capable of being recorded by the obtaining of an acknowledgement of delivery.

If a company's registered office address fails to meet the necessary requirements, it is deemed unsuitable. In such cases, Companies House may take action against the company and its officers for committing an offense.

If Companies House determines that a company's registered office is inappropriate, it can be changed to a default address maintained by Companies House. Should a company’s registered office be moved to this default address it must provide a suitable address and proof of ownership within 28 days. Otherwise, Companies House may initiate proceedings to strike the company from the register.

Companies using an agent’s address or another third-party provider’s address as their registered office, must ensure the address meets the requirements for an appropriate registered office address.

Source:Companies House| 19-08-2024

Ordering documents from Companies House

Companies House offers interested parties the ability to order certified copies of certificates and documents held on the Companies House register.

You can order:

  • a company certificate with certified facts; or
  • a certified copy of a document held on the register.

You can place an order by:

  • using the Find and update company information service available at https://find-and-update.company-information.service.gov.uk/ – search for the company, and order from the ‘More’ tab; or by
  • calling the Companies House contact centre on 0303 1234 500.

There are two dispatch options for this service: standard or express dispatch. The standard service costs £15. Orders for incorporation documents cost £30. Companies House aims to send these orders within 10 working days. There is also an express service available at a higher cost.

You can request to include additional certified facts on a certificate. These are:

  • directors’ names, and details such as date of birth or nationality;
  • secretaries’ names;
  • registered office address;
  • the company’s objects; and a
  • summary statement – previously known as the good standing statement.

You cannot order certificates with information on people with significant control (PSCs), shareholders, shareholdings or statement of capital.

Source:Companies House| 15-07-2024

Restarting a dormant company

HMRC must be informed when a non-trading or dormant company restarts trading and becomes active for Corporation Tax purposes. Companies can use HMRC Online Services to supply the relevant information. 

When a company has previously traded and then stops it would normally be considered as dormant. A company can stay dormant indefinitely, however, there are costs associated with doing this and certain filings must still be made to Companies House. The costs of restarting a dormant company are typically less than forming a new company. 

The following steps are required:

  1. Tell HMRC that your business has restarted trading by registering for Corporation Tax again.
  2. Send accounts to Companies House within 9 months of your company’s year-end.
  3. Pay any Corporation Tax due within 9 months and 1 day of your company’s year-end.
  4. Send a Company Tax Return – including full statutory accounts – to HMRC within 12 months of your company’s year-end.

Whilst reporting dates for annual returns and accounts should remain the same. The Corporation Tax accounting period is different and is set by reference to when the company restarts business activities.

Source:Companies House| 07-07-2024

Do not respond if you receive this letter

Companies House published guidance titled ‘Reporting scams pretending to be from Companies House’ has been updated. The list is intended to help people check if contacts purporting to be from Companies House are actually a scam.

The guidance contains a list of emails, letters and phone calls that are fraudulent. The guidance can be useful to help decide if a contact is genuine or from a fraudster trying to trick people into supplying confidential or personal information.

One of the most recent updates has seen information added on a scam letter asking for payment of £48 for Enhanced Web Filing Access. Companies House say that you should not visit any webpage or QR code links, and do not make any payments to the details shown. If you receive this letter, you should not respond.

The guidance from Companies House also includes sections about a phishing scam related to a WebFiling account, suspicious job vacancies, pension liberation scams and company register payment requests.

There is also information for those who want to make charitable donations to support the people affected by Russia’s invasion of Ukraine. The Charity Commission and Fundraising Regulator has issued guidance for people looking to donate to make sure their donations reach the intended recipients.

Source:Companies House| 27-05-2024

Changes to Companies House Fees

There have been a number of significant changes in Companies House fees. These changes took effect on 1 May 2024. The last significant change in fees occurred in April 2016. 

The new fees have been calculated on a ‘cost recovery’ basis meaning that the fees are calculated based on what it costs to provide the services in question. Companies House state that they do not make a profit on their fees. 

Companies House guidance entitled Companies House fees has been updated to reflect all the changes. Companies House have said that the new fees will help ensure adequate funding going forward to recover costs incurred as well as to help fund the cost of new powers introduced as part of The Economic Crime and Corporate Transparency (ECCT) Bill. 

Prices shown below are some of the main changes that took effect from 1 May 2024: 

Transaction

New fee

Old fee

Incorporation Digital

£50

£12

Incorporation (same day) Software

£78

£30

Incorporation Software

£50

£10

Incorporation Paper

£71

£40

Confirmation statement Digital

£34

£13

Confirmation statement Paper

£62

£40

Change of name Paper

£30

£10

Change of name (same day) Digital

£83

£30

Change of name Digital

£20

£8

Registration of a charge Paper

£24

£23

Registration of a charge Digital

£15

£15

Voluntary strike off Paper

£44

£10

Voluntary strike off Digital

£33

£8

Registration of an overseas entity Digital

£234

£100

The full list of changes can be found in the guidance mentioned above at https://www.gov.uk/government/publications/companies-house-fees/companies-house-fees

Source:Companies House| 20-05-2024

Register an overseas company

An overseas company must register with Companies House if they want to set up a place of business in the UK. This would mean that the overseas company has a physical presence in the UK through which it carries on business.

If an overseas company does not have a physical presence in the UK, they are not usually required to register with Companies House. For example, an independent agent who conducts business on behalf of an overseas company is not seen as the overseas company having a physical presence in the UK, neither is an occasional location such as a hotel where a director of an overseas company may conduct business during periodic visits to the UK.

If the overseas company is required to register, they must submit a completed OS IN01 form and pay a registration fee of £71 to Companies House. If the company is registering its first UK establishment, it must also send Companies House a certified copy of the company’s constitutional documents and a copy of the company’s latest set of accounts (with a certified translation in English if prepared in another language).

The overseas company can be registered using its corporate name (its name under the law of the country of incorporation), or an alternative name under which it proposes to carry on business in the UK.

Source:Companies House| 13-05-2024