January 13, 2021 Squeezing Company Account Filing Deadlines
The Department for Business, Energy & Industrial Strategy has published a follow up consultation to the response to the Corporate Transparency and Register Reform Consultation that explores the possibility of reducing the timescales for companies to deliver financial information to Companies House.
Below, we discuss government proposals to reduce the amount of time that companies have to file accounts with Companies House, the problems this could cause and how Elemental can help.
A private limited company currently has 9 months from the end of its accounting period to file accounts with Companies House. The equivalent period for a public limited company is 6 months.
The government believes these time periods to be too long given that most accounts are now filed digitally. It also points to the importance of financial data filed on the register being as current as possible to ensure it is as useful as possible and that business decisions are made based on data that is reliable. This will, according to the government, increase the value of data and boost the UK economy.
The government received suggestions in its initial consultation that filing deadlines for private companies be reduced from 9 months to somewhere between 3 and 6 months. The consultation explicitly asks what the impact would be were filing deadlines shorter to 3 months for public and 6 months for private companies therefore suggesting that these are the kinds of reductions being considered.
Lopping three months off the filing deadline for companies will present significant challenges which must be balanced against the assumed benefits of more current financial data.
Accountancy and Audit firms will surely blanch at the thought of completing jobs within a significantly restricted time period. As the year end date for many companies cluster around either the tax year or the calendar year, there will be a significantly reduced amount of time to complete a huge amount of work.
Such deadline compression would risk a reduction in the quality and accuracy of financial information. Rushed processes may, therefore, offset any perceived economic gains.
How Elemental Can Help
The consultation is open until 3 February 2021 and can be responded to here. The government expects to respond confirming its plans in 2021. If the government decides to reduce the time period during which companies may file their accounts, it will be important to get organised and ensure that you have the appropriate processes in place.
Elemental can provide integrated support across both areas to ensure that you are compliant with any new or amended requirements.