At the end of March 2020, the UK government announced that it would introduce legislation to relax some of the statutory obligations on companies in light of COVID-19, in relation to holding AGMs, wrongful trading and insolvency restructuring provisions. That legislation has now been laid before the UK parliament in the form of the Corporate Insolvency and Governance Bill 2019-21 (the “Bill“). Whilst some of the measures contained in the Bill have been in the pipeline for several years, certain temporary measures to provide flexibility and help companies in the current COVID-19 crisis have also been introduced. One of those temporary measures relates to the extension of deadlines for certain filings and returns which companies are required to make at Companies House.
Companies are required to make statutory filings of certain documents at Companies House. These include company accounts and annual confirmation statements, which must be filed every year. Certain event-driven filings are also required, such as notifying a change in directors, a change of registered office or a change to the company’s persons of significant control (PSC) register. Failing to meet the prescribed deadline in relation to certain filings automatically results in a financial penalty and can result in the prosecution of the company’s directors or the company being struck off the register of companies.
When passed by parliament, the Bill will enable the Secretary of State to make regulations to extend deadlines for filing:
- company annual accounts;
- annual confirmation statements;
- registrations of charges (i.e. a mortgage);
- event-driven filings under the Companies Act 2006, such as notifying a change in directors, a change of registered office or a change to the company’s PSC register; and
- registrations/notifications of changes in relation to limited partnerships.
If the powers are exercised by the Secretary of State to extend the deadlines, he cannot extend the period longer than:
- 42 days, in a case where the existing period is 21 days or fewer
- 12 months, in a case where the existing period is between 3 and 9 months
Should the filing deadlines be extended by the Secretary of State, the extensions will expire on 5 April 2021.
Public company accounts
The Bill makes additional provisions for public companies which are required to file their accounts in the period from 25 March 2020 to 30 September 2020. Where this is the case, the deadline for the company to file its accounts will be taken to be the earlier of 30 September 2020, and the last day of the period of 12 months immediately following the end of the company’s relevant accounting reference date.
For example, if a public company’s accounting reference period ends on 31 December 2019, it would normally have 6 months to file its accounts meaning it has a deadline of 30 June 2020. Under these provisions, the deadline for that company will be extended to 30 September 2020.
Current extension option
It should be noted that the changes proposed by the Bill are not yet in force, so businesses should continue to comply with existing filing and reporting deadlines in the meantime. However, whilst the Bill makes its way through parliament, Companies House is currently allowing companies who already know that they will not be able to meet their accounts filing deadline the option to apply for a 3 month extension. The online application process takes approximately fifteen minutes and can be accessed here. Companies House has indicated that any application citing issues around COVID-19 will be automatically and immediately granted an extension. For all other filings, deadlines will stay the same until the Bill is passed by parliament. However, Companies House has, again, indicated that it will treat any appeals against late-filing penalties sympathetically if the late filing was for COVID-19 related reasons.
We regularly advise on company secretarial matters and have extensive knowledge of the latest government regulation and guidance in relation to COVID-19. For more information please do get in touch with any member of the corporate team or your usual Brodies LLP contact.
For information on how the Bill affects company meetings, please see our recent blog here.