Corporate report

Annual report by the Independent Adjudicators to Companies House, 2020 to 2021

Published 26 July 2021

Introduction

Companies House has 3 Independent Adjudicators: Dame Elizabeth Neville, Mr Leslie Cuthbert and Mrs Jessica Pacey. Our principal role is to deal with third stage appeals against late filing penalties imposed on companies and limited liability partnerships which have filed their accounts after the filing deadline. If an appellant wishes to pursue an appeal which has passed through the 2 internal stages of the appeals process, it’s passed to one of us. If an appeal is rejected by an Independent Adjudicator, the appellant may appeal to the registrar who is the final arbiter in the appeals process.

The Independent Adjudicators also consider complaints made against Companies House. If the complainant is dissatisfied with the outcome of the 3 internal stages for consideration of a complaint, they may ask for the matter to be referred to an Independent Adjudicator. A complainant who remains dissatisfied with the findings of the Independent Adjudicator may approach a Member of Parliament and ask for the matter to be referred to the Parliamentary and Health Service Ombudsman.

As well as adjudicating on cases referred to us, we make recommendations and suggestions on service and process issues with a view to improving organisational efficiency or fair treatment of customers. This year, we have made 5 recommendations which are set out in Appendix A, all of which have now been implemented. Two recommendations from 2019 to 2020 (Appendix B) are still outstanding and both relate to a current programme of work.

We are not part of Companies House and are completely impartial. A brief outline of our professional profiles may be found on the Companies House website. Our cases, whether appeals against late filing penalties or complaints, are allocated by rotation to ensure their random distribution. We do not give out our personal postal or email addresses to protect our privacy and security. We use the Companies House address for postal communications and we each have a Companies House email address.

This has been a very unusual year because of the impact of the coronavirus (COVID-19) pandemic on companies and on Companies House. On 23 March 2020, the UK went into lockdown and a stay-at-home order was imposed which banned all non-essential travel and contact with other people, and shut almost all schools, businesses and gathering places. Companies House adapted rapidly in order to continue to deliver its services, but delays occurred and turnaround times increased.

On 17 and 18 March 2020, the Cardiff, Edinburgh, London and Belfast offices of Companies House were closed to personal callers due to the pandemic and they remain closed at present although documents may be dropped off at the front counters during working hours. There are out of hours arrangements except in Belfast. The Companies House Contact Centre was closed to telephone callers from 25 March 2020. Callers were played a recording inviting them to send their queries by email. Companies House staff worked from home, insofar as was possible.

There was a recognition of the difficulties which COVID-19 and the lockdown would cause to many businesses and that a good number would not be able to file their accounts on time. From 25 March 2020, businesses could apply for a 3-month extension for COVID-19 related reasons to the period allowed to file their accounts. Such applications were automatically and immediately granted. Furthermore, most appeals against late filing penalties where companies had filed late due to COVID-19 related problems were allowed.

Where an appeal was rejected and the appellant referred to financial hardship as a result of the ongoing COVID-19 situation, a hold of 3 months was placed on the initiation of debt collection action. A 3-month hold was also placed on collection of older penalties for companies claiming that they were unable to pay due to loss of income relating to COVID-19.

On 27 June 2020, The Companies etc. (Filing Requirements) (Temporary Modifications) Regulations 2020 came into force which granted an automatic extension of 3 months to the filing deadline for any company or body required to file accounts at Companies House, without any need for an application. This was done in order to relieve the burden on businesses during the COVID-19 outbreak and allow them to focus all their efforts on continuing to operate. This applied to all entities with filing deadlines up to and including 5 April 2021.

A further temporary arrangement was made on 16 July 2020 which allowed authentication codes to be posted on request to a director’s home address instead of to the company’s registered office. This was to assist users who could not attend the registered office.

Companies House paused its voluntary and compulsory strike-off processes on 2 April 2020, resuming voluntary strike-off on 10 September 2020 and compulsory strike-off on 10 October 2020. They were paused again from 21 January 2021 until 8 March 2021.This was done to provide companies with more time to update their records and help them avoid being struck off the register. It was also done to protect creditors and other interested parties who might have had difficulties in receiving notices or registering an objection to a company being struck off the register, or whose objections had not yet been processed.

An online appeals system went live on 6 September 2020. It’s designed to simplify the initial stages of an appeal by focussing the appellant on their precise grounds for appeal and to speed up logging and response times. Use of the online process is encouraged but is not mandatory and appeals may still be made by email or letter. Initial figures are encouraging with about 16% of appellants using the online process.

In addition, on 19 October 2020 Companies House changed debt collection agents. Delays in collection action arise when there is a handover even when there are no other complications. It’s not uncommon for directors and their agents to initiate or resume their appeals at the point when collection action itself is initiated or resumed. In a number of instances this occurred many months after the penalty was imposed, a number of appeals were received for quite historic cases.

Appeals

Numbers of cases and types of company

Appeals were received against 47,166 (26.5%) of the 177,865 late filing penalties imposed between 1 April 2020 and 31 March 2021. This was an increase in the number of appeals of 14,968, largely because of accounts filed late due to the effects of the pandemic. The number of appeals allowed increased to 15,708 (8.8% of appeals made, compared to 1.9% the previous year) for the same reason. There were 30,828 rejected appeals (excluding cancelled penalties).

The Independent Adjudicators considered 115 appeals in the period 1 April 2020 to 31 March 2021, a reduction of 65% on the number referred to us last year (329), approximately 0.37% of the rejected appeals, well below the 1.19% referred to us last year (see Table 1). We do not know the reason for this decline in referrals to us.

Table 1: Number of appeals considered by Independent Adjudicators

	2011-12	2012-13	2013-14	2014-15	2015-16	2016-17	2017-18	2018-19	2019-20	2020-21
Total	583	466	391	305	306	329	267	337	329	115

Where the late filing of the accounts was directly attributed to COVID-19, generally these appeals were automatically allowed by Companies House, so these cases did not progress to us. We did receive 21 cases (18%) where the pandemic was a grounds for appeal but was not considered by Companies House in earlier stages to have caused the late filing. These types of appeal tended to make general statements on the wider impact of COVID-19 or to argue that there should be latitude because of the general situation, irrespective of any specific impact on the company. We did not uphold any appeals on these grounds.

Types of companies

The nature of the companies appealing against penalties imposed because their accounts had been filed late was broadly in line with the distribution of previous years. The types of company which made up more than 10% of our appeals are listed below:

• dormant/not trading: 38 (33%)
• double penalty imposed 24 (21%)
• first accounts 15 (13%) (some were also dormant/not trading)
• not for profit, charity or CIC (Community Interest Company) 14 (12%)

First accounts and dormant companies

As always, dormant companies are over-represented in the cases referred to us with no change from last year. Sometimes these companies are filing their first accounts, so there is a degree of overlap between the 2 categories. For some years now, Companies House has been sending a letter to directors on appointment which sets out, among other things, the requirement to file a set of accounts every year. In the case of newly incorporated companies, the letters will have been just after incorporation, ie 21 months before the deadline for filing the company’s first accounts, by which time the content may well have been forgotten. Some directors believe that because Her Majesty’s Revenue and Customs (HMRC) may not require dormant companies to file accounts, the same applies to Companies House, failing to appreciate the fundamental difference in the purpose of the requirement (collection of corporation tax in the case of the former and maintaining a public record for the latter).

Last year, we recommended that Companies House consider how compliance by dormant and newly incorporated companies might be improved, given their already disproportionate lack of compliance and in light of the intended withdrawal of the paper reminder to file the accounts. (See Appendix B, item 1). We were concerned that the situation might worsen following the withdrawal of the reminder letter which took place on 9 November 2020.

Ideas advanced by us were that the new director’s letter could present the requirement for all companies to file accounts in in a more impactive way or it could be highlighted with the incorporation documents. Another suggestion was to place a red warning flag on e-reminders to companies filing their first accounts or which had filed dormant accounts in the previous year.

Our recommendation was passed to the team running the pilot for the project to withdraw the paper reminder sent by post and only to send email reminders, which has now been fully implemented. Companies House ran a ‘directors’ responsibilities’ campaign between January and March 2021 using social media and providing short webinars. Improvements were made to the Being a company director guidance page on the Companies House website. The Companies House Communications Team is carrying out analysis to identify what more might be done. We remain concerned about the impact of the withdrawal of the paper reminder letter on dormant companies and those filing their first accounts, so this recommendation remains outstanding and we shall be monitoring the issue in the appeals which reach us.

Not for profit, charity and Community Interest Companies (CICs)

Like dormant companies, these types of company often fail to appreciate their responsibilities, or they are not foremost in the directors’ minds.

Previously, there was a particular problem with CICs which could not file their accounts online. Errors were often made in filing the accounts in paper form as another document and a payment had to be submitted in addition to the accounts. CICs sometimes tried to file their accounts online close to the filing deadline, only to find that it was not possible and then missed the deadline. CICs filing their first accounts were more affected. Webfiling was made available to CICs on 2 September 2019 which has eradicated these specific problems, as errors are flagged up when accounts are filed electronically. We upheld one appeal from a CIC which dated from before Webfiling was available.

Grounds for appeal

Appellants frequently have more than one grounds for appeal. Over the years, there has been little change in the most common grounds for appeals to the Independent Adjudicators. Reasons for late filing which were given for over 10% of the cases referred to us are listed below.

Financial hardship or penalty is unfair

A substantial number of appeals (45 or 39%) included as grounds for appeal that the company or appellant cannot afford to pay the penalty or is experiencing financial hardship, or that the amount of the penalty is unfair or disproportionate compared to the magnitude of the infringement. As explained above, during the last year Companies House has exercised forbearance on debt collection in cases of financial hardship.

Ill health of director

In 28 (24%) of cases, the appeal was based on physical or mental illness of a director. Where a company has more than one director, Companies House expects the other director(s) to step in, as all directors have equal responsibility for ensuring that accounts are filed on time. An example of an exception would be where the second director is a spouse of the director suffering serious ill health and is seriously affected by the situation. Where an illness or injury is long standing or chronic, Companies House expects the director(s) to make arrangements or to have contingency plans to ensure the timely filing of the accounts.

Exceptional circumstances

Twenty-two or 19% of appeals were on the grounds of exceptional circumstances other than a director’s ill health, eg death of a director, bereavement, fire or flood, computer failure. The registrar will allow appeals of this nature but only if the exceptional event was the cause of the late filing and occurred sufficiently close to the filing deadline to make it impracticable to make alternative arrangements or apply for an extension to the filing deadline.

Electronic filing of accounts

Some users continue to experience problems filing their accounts electronically and this was a grounds for appeal in 25 (22%) of cases referred to us. In 9 of these cases, it seemed that the user had failed to complete the submission process, in spite of improvements to the screens designed to prevent this. We had previously recommended improvements to the screens for DCA (dormant company) accounts to make it less likely that a user will fail to complete the submission which have been implemented. In 2019 to 2020, we recommended that improvements also be made to the WebFiling screens for micro-entity accounts to prevent users from stopping when they reached the screen where they can print the accounts and which make it clear that they must carry on to complete the submission process. The improvements came into effect on 23 May 2020 and a guidance video was made available in mid-October 2020. Callers to the Contact Centre asking about filing micro-entity accounts are advised to watch the video. (See Appendix B).

Problem with accountant or other third party

Having a problem with an accountant, bookkeeper or member of staff was cited as a reason for the accounts being filed late in 18 (16%) cases. Because the legal responsibility for filing accounts rests with the director (or directors) of a company and not any third party, such appeals are usually rejected, although one was upheld this year. During the pandemic, Companies House extended its discretion not to collect a penalty to suitable cases where a third party was unable to prepare or submit the accounts due to a COVID-19 related problem.

Non-receipt of a reminder to file the accounts

In 13 cases (11%), non-receipt of a reminder to file accounts was a grounds for appeal. Until 9 November 2020, Companies House posted a reminder letter to a company’s registered address about a month before the filing deadline if it had not registered to receive reminders by email or had not already filed its accounts. This spelled out that the company must file accounts even if it was dormant or had not traded. The same message is conveyed in email reminders. On 9 November 2020, a letter was sent to all companies not registered for e-reminders to inform them that they will no longer receive paper reminders and advising them to sign up to the e-reminder service.

Appeals to the registrar

The fourth and final stage of the appeals process is an appeal to the registrar. Forty-four of the appeals rejected by the Independent Adjudicators were the subject of a further appeal to the registrar (see Table 2). The registrar did not uphold any appeals. The Independent Adjudicators advise appellants that a further appeal is unlikely to be successful if it’s based on the same grounds as heretofore. In most cases, appeals to the registrar do not contain any new information, and the registrar only occasionally reaches a different conclusion from the Independent Adjudicator.

Table 2: Referrals to the registrar

	Number of cases escalated to registrar	% of total cases dealt with by Adjudicators
2007-08	22	37
2008-09	27	23
2009-10	68	20
2010-11	109	22
2011-12	120	21
2012-13	112	24
2013-14	85	21
2014-15	68	22
2015-16	62	20
2016-17	64	16
2017-18	86	32
2018-19	140	42
2019-20	110	33
2020-21	44	38

Upheld appeals

We upheld or partially upheld 12 (10%) of the appeals referred to us. We made a number of recommendations and Companies House has already implemented them (see Appendix A).

Ill health of director

Two appeals upheld.

Appeal 1

Companies House had correctly rejected the appeal from the sole director against the penalty imposed for the late filing of the 2017 accounts but he provided new information to the Independent Adjudicator, that he had unexpectedly developed a serious mental illness shortly before the filing deadline which was the reason for the late filing of the accounts.

Appeal 2

The sole director of 2 companies, one of which was dormant, which filed their accounts after their respective filing deadlines, sustained a debilitating injury which prevented him from retrieving accounting paperwork from one of the unlabelled boxes which had been packed for an office move. He was also suffering from a severe mental illness. The Independent Adjudicator found that neither the injury nor the ill health would have prevented the timely filing of the accounts for the dormant company but accepted that they may have caused the late filing of the accounts for the trading company. The appeal was allowed for this company but not for the dormant company.

Exceptional circumstances other than ill health of director

Three appeals upheld.

Case 1

Both the 2016 and 2017 accounts for this company were filed after the deadline. The Independent Adjudicator found that the circumstances prior to the filing of the company’s 2016 accounts were exceptional (concealment of financial information from the director, threats to his father) and upheld that element of the appeal, but concluded they were too far removed in time to be accepted as a reason for the late filing of the 2017 accounts.

Case 2

A catastrophic fire at the offices of the company’s accountants occurred shortly before the filing deadline and the accounts were filed late. Circumstances made it impractical to seek an extension to the filing deadline and the Adjudicator therefore upheld the appeal.

Case 3

The 2017, 2018 and 2019 accounts for 3 companies were filed after their deadlines. The previous director had died shortly before the filing deadline for 2 of the companies and the 3 companies had no director for 18 months, until one was appointed by the High Court. Up to this point, the accounts could not be prepared as no-one had authority to obtain the relevant company documents and the deceased director’s computer records were inaccessible. The Adjudicator upheld the appeal in relation to the 2017 and 2018 accounts for the 3 companies but rejected the appeal against the penalties imposed for the late filing of the 2019 accounts, as the new director had been appointed prior to their filing deadlines and extensions to the filing deadlines could have been sought.

Accounts not correct, needed to be resubmitted, penalty moved to the next band

1 appeal upheld.

This company’s accounts were received at Companies House before the filing deadline and were correctly rejected. By the time they were resubmitted, the filing deadline had passed and, if they had been accepted at that time, the company would have been liable to a late filing penalty in the first penalty band of £150. The accounts were again rejected for a reason which should have been identified at the time of the first rejection. By the time acceptable accounts were received, more than a month had elapsed since the filing deadline and the penalty had risen to £375. The Adjudicator found that Companies House was responsible for the increased penalty and recommended that the company was liable only for the lesser penalty of £150.

Postal delay

1 appeal upheld.

The Royal Mail took 13 days to deliver the company’s accounts. Normally, a postal delay would not be an acceptable reason for accounts being filed late, but when the accounts were posted, the national lockdown had come into effect. People were being told to stay at home and the option of going to the post office to use a form of guaranteed delivery was not practically available as it was against government advice. Nor would hand delivering the accounts to one of Companies House’s offices have been appropriate for the same reason. Whilst the Royal Mail does not guarantee that first class post will be delivered the next day, the time which it took suggested that the delay was due to Royal Mail staffing issues relating to the pandemic. The appeal was allowed.

Accountant’s ill health

1 appeal upheld.

The company’s long term previously reliable sole practitioner accountant had become ill immediately prior to the date of the filing deadline and did not contact the director to let him know. It was recommended that in these particular circumstances, the registrar should exercise her discretion not to collect the penalty.

Companies House contributed to the delay in filing the accounts

4 appeals upheld.

Case 1

This company is a community interest company (CIC) and at the time the accounts were due, CICs could not file their accounts online, although this facility has now been enabled. When one of the directors telephoned Companies House for assistance, she was wrongly told that the accounts could be filed electronically through the website of the CIC Regulator. By the time the error was discovered, it was too late to file paper accounts by the deadline. The Adjudicator found that this mistake contributed to the late filing of the company’s accounts.

Case 2

Prior to the filing deadline one of the company’s directors had gone to the Companies House office in Edinburgh and handed in the accounts. He was not told that staff are not qualified to check documents and believed from what the member of staff said that the accounts had been checked and were satisfactory. However, the accounts were not acceptable for filing and were subsequently rejected and returned to the company. By the time acceptable accounts were filed, the filing deadline had passed and the company incurred a late filing penalty.

At that time there was no sign at the Companies House Edinburgh office to indicate that staff at the front counter are not qualified to express any view as to the acceptability of documents, unlike at other Companies House locations. It was recommended that a sign be installed at the Companies House Edinburgh reception desk to indicate that staff are not qualified to express any view as the acceptability of documents which are being delivered. This was done very promptly.

Case 3

The company’s accounts were filed over 9 months after the filing deadline and its accountant appealed against the penalty. In the normal course of events, the appeal would have been rejected. However, the accountant made representations that the accounts for another company had been filed late by his firm and the penalty had not been collected. The Adjudicator ascertained that the only distinction between the 2 companies was the date of the filing deadline. Whilst the accountant might consider himself fortunate that the penalty in the other case was not collected, the exercise of discretion not to collect a penalty must be consistent. Accordingly, given that Companies House accepted that there was no real distinction between the 2 cases, the Adjudicator found that it was inappropriate for Companies House to collect the penalty for one company but not for the other.

Case 4

Both the 2017 and 2019 accounts for the company were filed after the filing deadline. The director appealed against both penalties on the grounds of his ill health. The Adjudicator rejected the appeal on these grounds but noted that Companies House had failed to send a reminder to the company to file the 2019 accounts. Companies House has previously exercised its discretion not to collect late filing penalties where an accounts reminder notice has not been sent and the Adjudicator recommended that this should apply in relation to the late filing of the 2019 accounts. The Adjudicator did not uphold the appeal in relation to the late filing of the 2017 accounts.

Other observations and recommendations

In the course of considering the appeals, both we and appellants identify matters which have not gone well or would benefit from improvement, even if the appeal has not been upheld. We draw such matters to the attention of Companies House in the interests of effectiveness of systems, better customer service and improved compliance.

Keeping up to date with changes

We have sometimes not been advised of changes at Companies House which are relevant to the matters we consider and to the customer journey. Staff replying to appeals sometimes make mistakes because they are unaware of changes. We asked Companies House to consider how such changes can be captured and disseminated. The Adjudicators and the Late Filing Penalty managers are now kept up to date through a monthly report which was introduced in September 2020. Caseworkers are provided with relevant updates in their daily meetings.

No hold placed on recovery proceedings while appeal in progress

We made recommendations in our 2018, 2019 and 2020 reports that Companies House should ensure that a hold is placed on recovery proceedings while an appeal is in progress. We continued to see cases during 2020 to 2021. Companies House is developing a process for an automatic hold to be placed by its finance system on action to collect the penalty when an appeal is made via the electronic system. The automatic hold will not apply to appeals which are not made using the electronic system. A manual system is currently being used to capture cases where an appeal should be placed on hold. Therefore, this recommendation has not been signed off. See Appendix B, item 3.

Quality of responses to appeals

We recommended last year that Companies House improves the quality of its responses to appeals. A programme of work was scheduled to take place during 2020 to improve both the contents of standard letters and the quality of individual letters to ensure that they are relevant and use language which is accessible and meaningful to the non-professional filer. It’s to include consideration of a clearer way to express the limited discretion of the registrar. There have been delays due to the pressures caused by COVID-19 but improved quality control is now in place. There appears to have been an improvement and we will continue to monitor the situation see Appendix B, item 6.

Response to recommendations and observations by the Independent Adjudicators

On occasion, we consider that a group of staff or an individual would benefit from feedback. On 3 occasions in 2020, we identified the same member of staff whose replies to appeals were unsatisfactory for 2 reasons. These same 2 problems had been identified in the previous year, not just for the individual but for their team. We had been told that action had been taken. The Adjudicators questioned why the same mistakes continued to be made and it transpired that none of the 3 specific requests for feedback and training for the individual had been referred to the unit where they work. This was done at once and appropriate action taken.

It transpired that this was part of a systemic problem. Companies House no longer had a system to collate and consider our comments and recommendations or to follow them up. This had affected a number of the recommendations made in 2019 to 20 where little or no action had been taken in-year. Communication was poor and we received little feedback or information. In September 2020, an excellent tracking system was set up by the incoming incumbent of the relevant post and progress is reviewed monthly. As a consequence, for the first time, all of our recommendations were dealt with during the course of the year and are now discharged (see Appendix A).

Complaints

Two complaints were referred to us at the third stage of the complaints process, the second of which was upheld.

Complaint 1

The Independent Adjudicator did not uphold any of the complaints which alleged that the 4 members of staff at Companies House with whom the complainant had engaged were either:

• (a) incompetent
• (b) lying
• (c) colluding with others against the complainant’s interests

The Adjudicator recommended that Companies House consider creating a vexatious complainant policy and procedure to enable Companies House to deal with individuals who meet the definition of what might be termed as persistent or vexatious complainants i.e. that very small number of customers who pursue the same issue(s) repeatedly, even though everything has been done to settle their complaint, akin to the process which HMRC already has in place.

The recommendation was accepted and on 5 October 2020, Companies House published its ‘Unacceptable Customer Behaviour Policy’ which includes policy on unreasonable demands and vexatious complaints and describes the procedures which will be followed.

Complaint 2

The second complaint was over the legality of the registrar’s action in temporarily deferring the process for the voluntary dissolution of a company as a response to COVID-19. The Adjudicators cannot investigate complaints over legal interpretation which are dealt with by the Companies House’s own legal department and the Adjudicator did not uphold this part of the complaint.

The complainant had nevertheless wished his complaint to be considered by an Independent Adjudicator. He complained that Companies House had prevented him from approaching the Independent Adjudicators. This complaint was not upheld.

Further complaints were that the Companies House guidance did not provide information on how to escalate a case through the complaints process or how to contact the Independent Adjudicators. He also complained that he had not been given the opportunity to submit his own case to the Adjudicator. In the case of appeals against late filing penalties, when the appeal is referred to an Independent Adjudicator the appellant is advised to send in any further information within a specific timescale.

The Independent Adjudicator upheld the latter 3 complaints and made 2 recommendations:

• that Companies House should provide information to customers on how to escalate a complaint and how to make contact with the Independent Adjudicators
• that complainants be invited to submit further information or representations when their complaint is referred to the Independent Adjudicators

Both recommendations were implemented in a short time frame.

Complaints made within appeals

Five complaints were made in the course of an appeal against a late filing penalty, 3 of which alleged discrimination on the grounds of race or disability. None of the 5 complaints were upheld.

Complaint 1

An appellant complained that Companies House had discriminated against him because he suffers from dyslexia. This complaint was not upheld.

Complaint 2

In this case, the appellant complained of racism by a member of staff in the Companies House Contact Centre. The Adjudicator listened to the recording of the telephone call and found that the call handler had behaved entirely properly and had not shown any hint of racism.

Complaint 3

In this case, the appellant complained that a member of Companies House staff had displayed an unsympathetic and derogatory attitude towards him, that he had not been assisted to make his complaint and that he had been discriminated against on the grounds of his disability and ethnicity. The Adjudicator found that the member of staff had been courteous and professional. The complaints were not upheld.

Complaint 4

A complaint was made that the appeal against the late filing penalty had not been well handled. The Adjudicator did not find this to be the case and did not uphold the complaint.

Complaint 5

The appellant complained that Companies House had failed to meet its service standard of sending a full reply to emails within 10 working days. Companies House had already explained that it was not currently possible to achieve this standard due to the effect of pandemic and had apologised. The complaint was not upheld.

Conclusion

Companies House has been under severe pressure over the last year due to the COVID-19 pandemic and the consequent restrictions. Rapid action was taken to ensure continuity of service while making the transition for many staff to work from home. The staff in the Senior Casework Unit with whom we deal behaved with their usual professionalism, efficiency, patience and good nature, making what seemed to us to be a seamless transition to home working, although we imagine that they experienced difficulties and were subject to stresses which were not visible to us.

There has been great improvement in the efficiency of the relationship and the quality of communication between the Independent Adjudicators and the Senior Appeals Manager. Companies House has been responsive to our recommendations which have all been actioned during the year. We expect that the number of appeals reaching us will increase from this year’s low level but we do not doubt that everything will continue at its present high standard.

Appendix A

Summary of recommendations 2020 to 2021

Appeals

It was recommended that a sign be installed at the Companies House Edinburgh reception desk to indicate that staff are not qualified to express any view as the acceptability of documents which are being delivered. This was done very promptly. Complete.

We are sometimes not advised of changes at Companies House which are relevant to the matters we consider and to the customer journey. Staff replying to appeals sometimes make mistakes because they are unaware of changes. We asked Companies House to consider how such changes can be captured and disseminated. The Adjudicators and the Late Filing Penalty managers are now kept up to date through a monthly report which was introduced in September 2020. Caseworkers are provided with relevant updates in their daily meetings. Complete.

Complaints

The Adjudicator recommended that Companies House consider creating a vexatious complainant policy and procedure to enable Companies House to deal with individuals who meet the definition of persistent or vexatious complainants.

On 5 October 2020, Companies House published its Unacceptable customer behaviour policy which includes policy on unreasonable demands and vexatious complaints and describes the procedures which will be followed. Complete.

Companies House should provide information to customers on to how to escalate a complaint and how to make contact with the Independent Adjudicators. This recommendation was implemented in a short time frame. Complete.

Complainants should be invited to submit further information or representations when their complaint is referred to the Independent Adjudicators. This recommendation was implemented in a short time frame. Complete.

Appendix B

Summary of recommendations 2019 to 2020

We recommend that Companies House considers how compliance by dormant and newly incorporated companies might be improved, given their already disproportionate lack of compliance and in the light of future potential developments.

Paper reminder to file companies’ accounts were withdrawn on 9 November 2020 and reminders are now only sent by email. Companies House wrote to all companies not signed up to receive e-reminders to encourage them to do so. A directors’ responsibilities campaign was run between January and March 2021 using social media and providing short webinars. Improvements were made to the Being a company director guidance page on the website. The Companies House Communications Team is carrying out analysis to identify what more might be done. We remain concerned about the impact of the withdrawal of the paper reminder letter on dormant companies and those filing their first accounts, so this recommendation remains outstanding and we shall be monitoring the issue in the appeals which reach us. Recommendation not discharged.

The Adjudicator recommended that Companies House consider how companies trying to file accounts during a planned or unplanned shutdown may be assisted where the filing deadline is about to elapse. It was suggested that consideration be given to placing advice on how to apply for a short extension on the announcement of the shutdown on the Companies House website. As long as the application is received prior to the deadline, it can be allowed.

Companies House had decided not to adopt this recommendation, considering that downtime is never planned to take place at the end of the month which is when most companies have their filing deadlines. Unplanned downtime is infrequent and usually only for a short period of time, which allows filers to file later in the day. Complete.

We urge Companies House to ensure that a hold is put on recovery proceedings while an appeal is in progress. Companies House is developing a process for an automatic hold to be placed by its finance system on action to collect the penalty when an appeal is made via the electronic system. It will not apply where appeals are not made using the system. In the meanwhile, Companies House is reliant its former systems. This recommendation is outstanding pending the introduction of the new system. Recommendation not discharged.

We recommend that improvements be made to the WebFiling screens for micro-entity accounts to help users complete the submission process. Changes to the process for the submission of micro-entity accounts was implemented in May 2020 and a guidance video made available in mid-October 2020. Complete.

We recommend that the e-Reminder provides clearer information on what to do if there is a problem filing the accounts on time and advises that late filing penalties increase with the period of delay. This was implemented on 13 February 2020 and a guidance video was made available in mid-October 2020. Complete.

We repeat our recommendation from last year that Companies House improve the quality of its responses both to appeals and from the Compliance Section, to include the Scottish and Northern Ireland Offices. A programme of work was scheduled to take place during 2020 to improve both the contents of standard letters and the quality of individual letters to ensure that they are relevant and use language which is accessible and meaningful to the non-professional filer. It was to include consideration of a clearer way to express the limited discretion of the registrar. There have been delays due to the pressures caused by COVID-19 but improved quality control is now in place. Athough there appears to have been an improvement, we will continue to monitor the situation. Complete.