New Penalty Regime for Late Filings with Companies House

The UK government has introduced a new penalty system for companies that fail to meet their filing requirements with Companies House. This system, documented in The Economic Crime and Corporate Transparency Act 2003 (Financial Penalty) Regulations 2024, came into effect on 2 May 2024. It aims to improve corporate compliance, transparency, and timely reporting.

Under the new legislation, the Registrar of Companies has powers to impose direct financial penalties if it is satisfied (beyond a reasonable doubt) that a person has engaged in conduct amounting to “a relevant offence” under the Companies Act 2006 (CA 2006). The definition of “relevant offence” is very broad, covering all offences under the CA 2006 with a few exceptions (relating to company secretaries, resolutions and meetings, and audit).

For clarity, Companies House has also recently published a Guidance Note explaining how they will use their enforcement powers to issue financial penalties.

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What business owners needs to know‍‍

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‍Filing obligations‍

The regime covers the filing of key documents such as:

• the annual confirmation statement;
• the annual accounts;
• the register of persons with significant control;
• director details;
• details of new shares issued or reductions in share capital; and
• changes in the articles of association
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‍Enforcement procedure‍

Companies House will issue a warning notice if it suspects that a person is liable for a financial penalty.

The warning notice will provide:

• the reasoning for the suspicion;
• the action required by Companies House to remedy the breach; and
• the period within which the required action needs to be taken (which needs to be at least 28 days beginning after the warning notice date).

The person subject to the warning notice will also be informed of the option to make a written representation about their conduct.

There will be no financial penalty if the action required by Companies House is taken by the addressee of the warning notice within the specified period.

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Amount and rate of penalty

Companies House has the discretion to issue a fixed penalty, a daily rate penalty or a mixture of both, depending on how long the offender has been in breach. The financial penalties are calculated based on the seriousness of the offence and whether it is the first, second or third offence of the same type.

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The updated penalty system for late filings with Companies House created a shift towards stricter enforcement. Businesses should be aware of these changes and ensure that they comply with filing deadlines to avoid the financial risk of being penalised.

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