Corporate report

Annual report by the independent adjudicators to Companies House 2023 to 2024

Published 7 November 2024

1. Introduction

The number of independent adjudicators at Companies House increased to 5 in March 2023. One of our number, Mrs Jessica Pacey, unexpectedly became very ill and sadly died during the year, leaving Dame Elizabeth Neville, Ms Deirdre Domingo and Mr Brian Stanton.

Companies House appointed new adjudicators and Mr Tom Kettley and Mr Kieran Seale joined us at the end of the financial year.

Our principal role is to deal with third stage appeals against late filing penalties imposed on companies and limited liability partnerships (LLPs) which have filed their annual accounts after the filing deadline.

If an appellant wishes to pursue an appeal which has passed through the two internal stages of the appeals process, it is referred to one of us. If an appeal is rejected by an independent adjudicator, the appellant may appeal to the Registrar of Companies, who is the final arbiter in the appeals process.

The independent adjudicators also consider complaints made against Companies House.

If a 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.

We also deal with complaints which are related to appeals which have been referred directly to us without passing through the complaints process. A complainant who remains dissatisfied with the findings of the independent adjudicator may approach an MP 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 and fair treatment of customers.

This year, we have made 15 recommendations which are set out in Appendix 1. Two recommendations from 2020 to 2021 were still outstanding but are now discharged.

We are not part of Companies House and are completely impartial. You can find a brief outline of our professional profiles on the Companies House website.

Our cases, whether appeals against late filing penalties or complaints, are allocated by rotation to ensure impartiality.

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.

1.1 Appeals process

Companies House has an online appeals portal designed to speed up logging and response times and to simplify the appeals process. By March 2024, 46% of appeals were made electronically using the portal.

1.2 Sign up to email reminders

Companies House stopped sending reminders to file accounts by post on 2 November 2020 and companies were advised to sign up for reminders by email.

Although 89% of companies have signed up to receive email reminders, in nearly 30% of cases referred to us, the company has not signed up to receive email reminders. In some cases, they have started to register but have not completed the activation process, possibly because the confirmation email is goes into the recipient’s spam or junk folder.

Often, the filing deadline is missed because the directors are unaware of when it is. They only realise that the accounts need to be filed until the first compliance letter is received after the filing deadline, by which time a penalty is inevitable.

1.3 Early and second email reminders

With a view to improving compliance, Companies House plans to introduce a new early email reminder, starting with a pilot on a sample of companies.

The reminders will be sent 6 months before the confirmation statement filing deadline and 9 months before the accounts filing deadline, in addition to the usual filing reminders.

On 6 October 2022, Companies House introduced a second email reminder which is sent just before the filing deadline, if the accounts have not been filed following the first reminder sent about a month before the filing deadline.

1.4 Backlog of appeals

In the first part of the year, we continued to deal with appeals where consideration at the first stage of the appeals process was considerably delayed due to the serious backlog of appeals in 2021 to 2022, the impact of which carried on into 2022 to 2023.

The situation has now returned to normal.

2. Appeals

2.1 Numbers of appeals

The number of penalties imposed by Companies House in 2023 to 2024 has dropped again from the exceptionally high number of 380,153 penalties imposed in 2021 to 2022, many of which related to the COVID-19 pandemic.

There has been a corresponding drop in the number of appeals.

Table 1: Appeal rate and successful appeal rate

Year	Penalties raised	Appeals received	% appeal rate	Appeals allowed	% appeals allowed
2020-2021	178,264	47,166	26.5%	15,687	33.3%
2021-2022	380,153	83,347	21.9%	11,218	13.4%
2022-2023	322,680	64,289	19.9%	42,789	66.6% (rate due to COVID-19 pandemic)
2023-2024	295,251	51,403	17.4%	17,308	33.7%

The independent adjudicators considered 338 appeals in the period 1 April 2023 to 31 March 2024. However, 461 (about 1% of the total number of appeals) cases were referred to us, more than trebling the previous year’s numbers.

One hundred and twenty six cases were outstanding on 31 March 2024. This unprecedented situation was caused by the unexpected reduction in our numbers for 8 months of the year combined with the steep increase in the volume of cases referred to us.

Table 2: Number of appeals considered by independent adjudicators

	2012-2013	2013-2014	2014-2015	2015-2016	2016-2017	2017-2018	2018-2019	2019-2020	2020-2021	2021-2022	2022-2023	2023-2024
Total	466	391	305	306	329	267	337	329	115	87	128	338

We upheld 26 (8%) of the 338 appeals we dealt with and made 15 recommendations, including recommendations arising from complaints (see Appendix 1).

2.2 Types of companies

The nature of the companies appealing to the adjudicators against penalties imposed for late filing of their accounts was in line with the distribution of previous years.

Some data is missing due to Mrs Pacey’s sudden severe illness, and we have extrapolated accordingly. The types of company which made up more than 10% of our appeals are:

• double penalty imposed  43%
• dormant/not trading:  35%
• first accounts 23% (some were also dormant/not trading)
• charitable purpose or community interest company (CIC) 11%

First accounts and dormant companies

We received 13,871 appeals (27% of all appeals) from companies registered as dormant in 2023 to 2024. We received 10,801 (21% of all appeals) from companies filing their first accounts. There is some duplication as some companies fell into both categories.

Companies House recognises the high level of non-compliance and is constantly seeking ways to improve compliance for these companies. The fact they are often not signed up to receive email reminders exacerbates the problem.

Dormant companies have often registered as such with HMRC and wrongly conclude that they do not need to file accounts at Companies House either.

In our 2021 to 2022 annual report, we recommended that the new directors letter sent to each director on appointment could present the requirement for all companies, including those not trading, to file accounts in in a more impactive way.

An updated version of the new directors letter was introduced on 1 September 2023. It states explicitly that dormant companies and those not trading must file accounts.

Another suggestion (see Appendix 2) advanced by us in our annual report for 2021 to 2022 was to place a red warning flag on email reminders to companies filing their first accounts or which had filed dormant accounts in the previous year.

We have been told that Companies House will be unable to make this change because of the volume of other work and the migration to software-only filing of accounts in the next few years.

2.3 Grounds for appeal

Reasons for late filing given for over 10% of the cases referred to us are listed below. Appellants very commonly cite multiple grounds for appeal.

Financial hardship or penalty is unfair or excessive - 54%

Fifty four percent of appeals included as grounds for appeal that the company or appellant is experiencing financial hardship or that the amount of the penalty is excessive.

This is not an acceptable grounds for appeal as the registrar has no discretion not to collect a penalty on the basis of ability to pay.

Ill health or catastrophe - 47%

We upheld 6 such cases where exceptional circumstances applied, one of which related to the ill health of a sole director.

The registrar’s discretion not to collect a penalty is very limited. It is not enough for a director or director’s immediate family to have suffered ill health or a catastrophe, but it must have been the reason why the accounts cannot be filed on time.

In appeals based on ongoing ill health, usually the director had an opportunity to make alternative arrangements. Where a company has more than one director, if one cannot file the accounts, then another director should do so, irrespective of their usual responsibilities.

This is because the legal position is that all directors share equal responsibility for filing the accounts.

Problem with accountant or third party - 24%

Appeals on these grounds made up 24% of appeals.

The legal requirement to file accounts on time rests with the directors of a company and not anyone they retain on their behalf, so can only be upheld in exceptional cases. We upheld one such appeal.

The company is dormant 22%

None of these appeals were upheld. All companies, including companies which are not trading, must file accounts at Companies House every year.

Problem with electronic filing of accounts  22%

Users experience various problems when filing their accounts electronically, which the vast majority do.

Sometimes, they do not have their authentication code which is required to log on.

If it is close to the deadline or the registered office address is ineffective, they may not receive the reissued code in time as, for security reasons, it is sent by post.

CICs can only file their accounts electronically if they file full accounts using the Companies House Service, not WebFiling. This is because they must pay a fee and attach a form CIC34. Some users find it difficult to work their way through the process and others try to use joint filing to file their accounts simultaneously at HMRC which is not possible for CICs.

The independent adjudicators have asked Companies House to consider how the journey for CICs can be clarified. We identified that, not only do directors find the filing of CIC accounts online difficult but some staff, including those working in late filing penalty appeals and in the contact centre, are not entirely clear on how to do this.

We recommended that advice be given to 2 members of staff, which has been done. We now make a wider recommendation to improve the knowledge of relevant staff on how to file CIC accounts online.  

Confusion or mistake by directors or person submitting the accounts 20%

We have observed during the year that directors frequently confuse HMRC and Companies House.

Sometimes they believe that in filing their accounts at HMRC, they have done all that is required. In other cases, they have registered their companies as dormant at HMRC and believe that this means that they do not need to file accounts at Companies House.

In a number of cases, companies were filing their first accounts and by their own account did not know what to do.

Sometimes, appellants think that they have been granted an extension to the filing deadline, even though letters to them from the compliance department state that no extension to the deadline has been granted, only a deferral of other action against the directors.

We have noticed that there is sometimes a lack of precision on this topic in telephone communications and with letters to directors. We upheld one such case and made a recommendation.

Wrong advice by Companies House or Companies House contributed to the delay - 18%

We upheld 10 such cases.

We wish to draw attention to the fact that contact centre and other staff generally provide very good advice.

COVID-19 (general impact) - 16%

Appeals continued to be made about the general impact of the pandemic on the company. Nearly all of these appeals related to the period after all restrictions had been lifted and we did not uphold any of them.

Non-receipt of a reminder to file the accounts - 13%

We did not uphold any of these appeals as the registrar is not legally obliged to send reminders.

It is incumbent on directors to know when the deadline is and to ensure that accounts are filed on time. Companies should register to receive email reminders.

2.4 Appeals to the registrar

The fourth and final stage of the appeals process is an appeal to the registrar.

One hundred of the 312 appeals rejected by the independent adjudicators were the subject of a further appeal to the registrar (see table 3).

The registrar upheld 2 cases. One was upheld due to a failure of the service provided by Companies House and another partially upheld because additional information was provided.  

Table 3: Referrals to the registrar

	Number of cases escalated to the registrar	% of total cases dealt with by adjudicators
2007/2009	22	37
2008/2009	27	23
2009/2010	68	20
2010/2011	109	22
2011/2012	120	21
2012/2013	112	24
2013/2014	85	21
2014/2015	68	22
2015/2016	62	20
2016/2017	64	16
2017/2018	86	32
2018/2019	140	42
2019/2020	110	33
2020/2021	44	38
2021/2022	32	37
2022/2023	34	27
2023/2024	100	32

2.5 Upheld appeals

We upheld or partially upheld 26 (8%) of the appeals which we considered.

Where an appeal was against more than one penalty in consecutive years, we sometimes upheld the appeal against one penalty but rejected the other.

In other cases, the accounts were already late when Companies House caused a further delay, and we determined that the lesser penalty should be paid.

Companies House gave wrong advice or contributed to the delay in filing the accounts

In 10 cases, the adjudicators concluded that Companies House had contributed to the delay in the filing of the accounts or had caused a higher penalty to be incurred.

Case 1 and 2

In both cases, the accounts were correctly rejected but returned to the wrong address so were not received.

Case 3

The appellant tried to file the accounts for 3 companies on the day of the filing deadline.

A maintenance message appeared on the website advising that there would be minimal disruption to its systems and that its filing services would be available as normal; however they were not.

The appeal was upheld.

In this case, the responses to the first and second level appeals were sent by the same person. This was wrong in principle. The whole purpose of the second stage is to bring a fresh and more senior set of eyes to bear.

It was recommended that Companies House advise its staff that appeals must be considered by different people at stage 1 and stage 2 of the appeal process.

This was done and no other cases have been seen since.

Case 4

The appellant tried to file the company’s accounts after the filing deadline but did not have the authentication code.

He could not immediately receive the reissued code because both he and the company had moved address. When he telephoned the Companies House contact centre for advice, he was not told that he could file the accounts in paper form.

If he had, he would have been able to file the accounts before the penalty rose to the next penalty band.

The adjudicator recommended that contact centre staff be reminded that companies can file their accounts in paper form and to give that advice in appropriate circumstances.

Case 5

In this case, a delay in issuing the authentication code led to the penalty rising to the next penalty band. The adjudicator found that the lower penalty was payable.

Case 6

The appellant sought advice after the filing deadline because he could not log on to file the company’s accounts as his email address had changed. This was because the system now uses two factor authentication, and an email would have been sent to the old email address for verification purposes. The adjudicator accepted that the appellant had not been given the correct advice which would have allowed him to file the accounts electronically before the penalty rose to the next band.

Case 7

The company had been offered a date credit by Companies House, but this had not been put into effect.

The adjudicator recommended that it should be, which would reduce the amount of the penalty to which the company was liable.

Case 8

Companies House made an error in failing to treat the appellant’s submission as an attempt to deliver accounts, which would have alerted them that the attempted delivery was unsuccessful and provided them with an opportunity to resubmit within time.

The appeal was upheld.

Case 9

Companies House advice given by telephone gave the false impression that an extension of time could be requested, whereas the deadline for delivery of accounts had already passed and the imposition of a penalty was inevitable.

This contributed to the delay in delivery after the deadline and increased the penalty.

The adjudicator found that the amount of the penalty should be reduced.

We identified a number of other similar situations in other appeals which had a similar lack of clarity, both on the telephone and in non-standard letters.

It is good practice for such communications from the compliance department to say explicitly, as they generally do, that no extension to the filing deadline has been allowed.

We have seen a small number of instances where the statement has not been made and recommend that the compliance department be advised accordingly to remove all possibility of misunderstanding. 

Case 10

Companies House incorrectly rejected an application to change the registered office address.

Had this error not occurred accounts would have been delivered on time because the appellant would have been able to access the authentication code posted by Companies House.

Exceptional circumstances

We upheld 6 cases where a range of exceptional circumstances applied.

Case 1

We upheld one such case where the appellant provided a report from her doctor showing complex and significant health issues for which she had received treatment shortly before the filing deadline.

Case 2

The adjudicator allowed this appeal on the basis that the cumulative issues experienced by the directors before the filing deadline (serious ill health of 2 directors, third director providing end of life care to dying father and 2 bouts of COVID-19) amounted to exceptional circumstances, albeit that individually they would not have met that threshold.

Case 3

The appellant had a reasonable belief that her company had been struck off.

When she found out it had not, she filed its outstanding accounts and confirmation statements in order to facilitate its strike off.

The unintended consequence was that the company incurred penalties totalling £6,000. The adjudicator found that the penalties should not be collected.

Cases 4, 5 and 6

In 3 cases, appellants had sought and been granted extensions to their filing deadlines.

They later extended their accounting reference dates (ARDs) which had the unintended and unexpected effect of nullifying the extensions to the filing deadline since they related to a period which no longer existed.

The filing deadlines became 9 months from the new ARD. The accounts became overdue on the date that the ARD was extended, which made it impossible to file the accounts on time.

The adjudicators considered that it was illogical to impose a deadline to a date in the past when at that date, the deadline was not in place. It was impossible for the directors to comply with the new retrospective deadline.

We recommended that Companies House upholds any future appeals in such circumstances. These circumstances are uncommon. Companies House has accepted our recommendation.

Problem with filing accounts online

We upheld 7 cases where issues had arisen with filing accounts electronically.

Cases 1, 2 and 3

In 3 cases appellants tried unsuccessfully to use the HMRC/Companies House joint filing system.

In 2 cases, the appellant provided supporting documents or screenshots showing the unavailability of the system and in the other the appellant gave a clear and convincing account of the difficulties they had experienced.

Cases 4, 5 and 6

In a further 3 cases, appellants experienced issues with WebFiling.

In 2 cases, the appellant provided evidence of a problem.

In the other, Companies House acknowledged that there had been problems on the relevant dates which contributed to the late filing of 2 sets of accounts. 

The adjudicators wish to see more evidence that systems were working normally in cases where the appeal is based on problems with online filing.

Companies House is now working with IT to carry out investigations into the status of the systems in such cases.

Case 7

The appellant in this case tried unsuccessfully to follow obsolete guidance on the Companies House website to file the company’s accounts at HMRC and Companies House using the joint filing system.

The adjudicator upheld the appeal.

She recommended that Companies House removes the obsolete advice from its website and the internet.

Rejection of accounts

Case 1

Not all the reasons for rejection were identified when the accounts were initially rejected.

The amended accounts were rejected again by which time the penalty had risen to a higher band.

The adjudicator recommended that the lesser penalty be collected.

We dealt with other cases of this type where we did not uphold the appeal because the second rejection had not led to an increase in the penalty, but we recommended, as we have in the past, that document examiners be given advice to identify all the reasons for rejection on first submission.

Case 2

There was a dispute between Companies House and the appellant as to whether accounts received before the deadline related to the accounting period for which accounts were outstanding or to the previous accounting period.

The information available did not allow the adjudicator to determine which was the case and the appellant was given the benefit of the doubt.

Problem with accountant

Case 1

The company’s former accountant had given an assurance that accounting material would be forwarded to the companies’ new accountant in time for the accounts to be prepared by the extended filing deadline.

She did not do so in spite of all the efforts of the directors to obtain it, including legal action. It was then too late to recreate the accounts by the extended deadline.

The directors had taken reasonable and proactive steps at each stage, and it was not obvious what more they could have done to obtain the material to file the accounts on time.

The adjudicator considered this to be an exceptional circumstance and that the penalties should not be collected.

Other observations and recommendations

The independent adjudicators sometimes make recommendations or observations in cases where we have not upheld an appeal against a late filing penalty.  

We dealt with a case where an LLP was unaware that it could not file its accounts electronically and the email reminder did not mention that some companies, including LLPs, cannot file their accounts electronically.

The adjudicator recommended that Companies House considers changing the wording of the email reminders to reflect the fact that some companies and LLPs cannot file electronically.

Companies House has said that it is unlikely to make this change because of the volume of other work and the migration to software-only filing of accounts in the next few years.

We also identified that the wording on micro-entity accounts to claim exemption from the requirement for a profit and loss report specified by document examiners differs from that which appears in Companies House guidance. We recommended that this difference should be resolved.

3. Complaints

We dealt with 4 complaints which were referred to us at the final stage of the internal complaints process. Two elements of the complaints were upheld. We made one recommendation.

Complaint 1

The sole director of a company died unexpectedly, and his partner asked Companies House not to dissolve the company until probate had taken place.

Companies House dissolved the company in error, which it freely acknowledges and has apologised profusely.

The partner of the deceased director has complained that the company was dissolved, and that Companies House will not restore it. Companies House does not have the legal power to reinstate the company but has advised the complainant what needs to be done, offered to support her through the process and to reimburse her costs.

The complaint was not upheld.

Complaint 2

A dyslexic complainant complained that Companies House had declined to allow him to dictate his accounts to them and for the accounts to be sent back to him for approval.

He also complained about not receiving the company’s authentication code which had been sent several times to the company’s registered office address which was no longer effective.

Neither complaint was upheld.

Complaint 3

The company was converted from being a limited company to being a CIC.

Companies House acknowledged that there had been confusion by its staff on receipt of the forms and they had been given feedback. Further inaccurate and ambiguous information was provided which gave an erroneous impression about the status of the conversion.

It was some time before the position of Companies House was clarified and confirmed. Companies House apologised to the complainant. The adjudicator considered that a fuller apology should have been made and upheld the complaint to that extent.

It was recommended that a fuller apology should now be made which acknowledged the numerous inaccurate statements made and the 2-month delay in confirming the Companies House position.

An advisory finding was made for Companies House to review its internal and publicly available guidance to consider whether any amendments, or other action, is required to minimise the risk of a similar misunderstanding occurring in the future (acknowledging the unique circumstances of this complaint).

Complaint 4

A number of complaints were made:

• not being able to file LLP accounts online, despite the fact that Companies House advertises that this can be done
• password resetting issues
• confirmation statement filing issues because of website failure
• the complainant had not received a requested call back
• written responses did not answer the core issues
• there were serious failures in the organisation
• although the company’s correspondence and head office addresses had been changed some years ago the old addresses still showed up on the website
• his date of birth appeared on the Companies House website
• he did not accept that he had made an error when he had problems changing his password

One element of the complaint was upheld: that on more than one occasion the complainant had not received a requested callback.

3.1 Complaints made within appeals

We consider complaints made within appeals if they are related to the appeal, although not part of the grounds for appeal.

Frequently, complaints are made about how an appeal has been handled. We identify the complaints and findings within our reports.

Fourteen complaints were made in 2023 to 2024 in the course of an appeal against a late filing penalty. Four complaints were upheld and 6 partly upheld. We made 3 recommendations.

Complaint 1

A complaint was made that the appellant had not been advised of their options to appeal further in the first response to their appeal.

In our 2021 to 2022 annual report, the independent adjudicators recommended that when appeals were rejected at the first stage of the appeals process, appellants should be advised of their options to appeal further. This was agreed, but it has been noted that this is no longer taking place.

We recommend that, in future, Companies House signpost the full appeals process in first stage responses. A review of standard sections in letters from the late filing penalties team is to commence shortly and this recommendation will be incorporated.

The complaint was upheld.

Complaint 2

A complaint was made about the level of service provided by Companies House.

The reply to the appellant’s first appeal was not sent to him and action to collect the penalty was initiated. When a copy of the reply was sent, it was incorrectly described as having been sent previously. Companies House had apologised.

This complaint was upheld but no further action recommended.

A complaint was also made that no extension to the filing had been allowed, but this could not be done as the filing deadline had passed. Not upheld.

Complaints 3, 4, 5, 6 - delays

As in 2022 to 2023, a number of appeals included a complaint about the long delays before receiving a response.

This was caused by the backlog in the Companies House appeals system which has now been resolved. In some cases, when there was a delay in logging an appeal, appellants were the subject of action to collect the penalties.

In most cases, Companies House had apologised, and we did not comment further.

These complaints were upheld to a limited extent.

One such complainant also complained of the tone of the responses which he found belittling and rude. The adjudicator did not agree and found the replies to be courteous and factual.

The appellant also complained about the delay in refunding the penalty when his appeal was upheld but the refund was made in 24 days.

Neither complaint was upheld.

A complaint of inaccurate advice was upheld but occurred in circumstances where the Companies House representative was trying to be helpful and inadvertently provided misleading information.

Complaint 7

The company’s accountant complained that his details appeared on the Companies House database. He had been the company secretary of 6 companies.

Companies House is the registry for all UK limited companies. Information about companies and their officers appears in the Companies House public register which is available for the public to search online free of charge. All directors or officers of a company must be prepared for some of their details to be publicly available.

Information about the officers of a company remains on the public register for the lifetime of the company. This includes details of all resigned officers.

When a company is dissolved, this information remains on the public register for 20 years. After 20 years, the information is transferred to The National Archives. This complaint was not upheld.

However, Companies House had not responded to the clear complaint made within the appeal. The adjudicator recommended that staff be reminded of the need to respond to complaints which are included with appeals.

The accountant also complained that the statutory letters sent to the company and the director about the overdue accounts and the late filing penalty notice were bullying and threatening. These are standard notices which set out the situation in clear language so that there is no misunderstanding by the recipient. Not upheld.

Complaint 8

A further complaint was made about the tenor of correspondence from Companies House. The adjudicator considered that it was courteous throughout and did not uphold the complaint.

Complaint 9

Companies House had already apologised for errors in correspondence which was the subject of a complaint to the adjudicators. Upheld to a limited extent but no further action recommended.

Complaint 10

A complaint was made that the appellant’s specific request for her appeal to be escalated was not acted upon. Upheld to a limited extent as the requisite information on how to escalate the appeal was provided.

The appellant also complained that the appeals process had caused her considerable stress and anxiety.

The adjudicator considered that the Companies House communications were courteous and thorough throughout and it was not obvious how the impact on the appellant could have been reduced. Not upheld.

Complaint 11

A complaint was made that late filing penalty invoices were sent to the company while the appeal was under consideration. They were both sent at the end of the period allowed for a further appeal to be received and before the further appeals were processed.

This was unfortunate but the complaint was not upheld.

Complaint 12

An appeal was made against penalties received by the company in 2 consecutive years. The director also complained that:

• his calls were terminated
• correct advice was not given
• documents were not delivered
• the certificate of postage for the accounts posted on 18 March 2023 had been hacked and deleted
• debt recovery agents had harassed him
• Companies House had not acted on notification of the company’s new registered office in 2022
• authentication codes were sent to the former registered office when Companies House was aware that it was ineffective
• several of his attempts to send a directors authority letter to allow an authentication code to be approved had been refused
• the company had not been served with a claim form and was unaware of the county court judgement imposed on the company

Many of the problems have been caused because the complainant did not wish to change the company’s registered office address which was no longer effective. None of the complaints were upheld.

Complaint 13

A complaint was made that the deadline given for the appellant to reply was insufficient. The email from Companies House was received at the start of the Christmas period and only allowed one week to reply. Upheld.

The adjudicator recommended that Companies House ensures that any deadlines set out in correspondence allow customers sufficient time and contain sufficient information to address the issues raised in that correspondence.

A second separate complaint had been made shortly beforehand and was the subject of a similar recommendation in the 2022 to 2023 annual report.

In both cases, period allowed for reply at the time of the preparation of the communication was sufficient but there was an unanticipated delay before it was sent out due to a changeover of service provider. It is not expected that there will be any recurrence.

Complaint 14

A complaint that a late filing penalty should not have been issued was not upheld.

4. Conclusion

During the course of the year, there have been a number of changes in the staff dealing with third stage appeals and those overseeing the appeals process at a senior level in the appeals process.

This has led to some loss of corporate memory, expertise and continuity. However, all new staff have quickly come up to speed. They are committed to improving the handling of appeals and are very responsive to our suggestions and recommendations.

We ourselves experienced a difficult 8 months with the tragic loss of one of our number. We would like to take this opportunity to pay tribute to Mrs Jessica Pacey and the substantial contribution which she made over many years.

We also thank Companies House for acting as speedily as they could to appoint new adjudicators to enable us to handle the large volume of work which comes our way.

Dame Elizabeth Neville DBE QPM DL on behalf of the independent adjudicators 

24 August 2024

5. Appendix 1: summary of recommendations 2023 to 2024

Some users find it difficult to work their way through the process for filing CIC accounts online and others try to use joint filing to file their accounts simultaneously at HMRC which is not possible for CICs. The independent adjudicators have asked Companies House to consider how the journey for CICs can be clarified.

We identified that some staff, including those working in late filing penalty appeals and in the contact centre, are not entirely clear on how CIC accounts should be filed online. We recommended that advice be given to 2 members of staff, which has been done. We now make a wider recommendation to improve the knowledge of relevant staff on how to file CIC accounts online.

It was recommended that Companies House advise its staff that appeals must be considered by different people at stage 1 and stage 2 of the appeal process. This was done and no other cases have been seen since. Discharged.

The adjudicator recommended that contact centre staff be reminded that companies can file their accounts in paper form and to give that advice in appropriate circumstances. Discharged.

It is good practice for communications from the compliance department after the filing deadline has passed to say explicitly, both by phone and in non-standard letters, that no extension to the filing deadline has been allowed. We have seen a small number of instances where the statement has not been made and recommend that the compliance department be advised accordingly to remove all possibility of misunderstanding. 

We recommended that Companies House upholds any future appeals in cases where an extension to the ARD nullified a previously granted extension to the filing deadline. Discharged.

The adjudicators wish to see evidence that systems were working normally in cases where the appeal is based on problems with online filing. Companies House is now working with IT to carry out investigations into the status of the systems in such cases. Discharged.

The adjudicator recommended that Companies House removes the obsolete advice on joint filing from its website and the internet. This has now been done. Discharged.

We recommended, as we have in the past, that document examiners be given advice to identify all the reasons for rejection on first submission.

The adjudicator recommended that Companies House considers changing the wording of the email reminders to reflect the fact that some companies and LLPs cannot file electronically. Companies House has said that it is unlikely to make this change because of the volume of other work and the migration to software-only filing of accounts in the next few years. Discharged.

The adjudicators also identified that the wording on micro-entity accounts to claim exemption from the requirement for a profit and loss report specified by document examiners differs from that which appears in Companies House guidance. We recommended that this difference should be resolved.

The company was being converted from being a limited company to a CIC. It was recommended that a fuller apology should now be made which acknowledged the numerous inaccurate statements made by Companies House and the 2-month delay in confirming its position. An advisory finding is for Companies House to review its internal and publicly available guidance to consider whether any amendments, or other action, is required to minimise the risk of a similar misunderstanding occurring in the future (acknowledging the unique circumstances of this complaint). The apology has been made. The second part of the recommendation is outstanding. .

A complaint was made that the appellant had not been advised of their options to appeal further in the first response to their appeal. We recommend that, in future, Companies House signpost the full appeals process in first stage responses. A review of standard sections in letters from the late filing penalties team is to commence and this recommendation will be incorporated.

Companies House did not respond to the clear complaint made within the appeal. The adjudicator recommended that staff be reminded of the need to respond to complaints which are included with appeals.

A complaint was made that the deadline given for the appellant to reply was insufficient. The adjudicator recommended that Companies House ensures that any deadlines set out in correspondence allow customers sufficient time and contain sufficient information to address the issues raised in that correspondence. A sufficient period had been allowed for reply at the time of the preparation of the communication was but there was an unanticipated delay before it was sent out due to a changeover of service provider. It is not expected that there will be any recurrence. Discharged.

6. Appendix 2: outstanding recommendations 2021 to 2022

We recommend that Companies House consider whether the new director’s letter should be amended to state explicitly that all companies must file accounts, whether trading or not, and to consider placing a red warning flag on email reminders to companies filing their first accounts or which filed dormant accounts in the previous year.

The new director’s letter has been amended. We have been told that Companies House will be unable to make this change to the email reminders because of the volume of other work and the migration to software-only filing of accounts in the next few years. Discharged.

The adjudicators again recommend that Companies House take dynamic action to improve compliance by dormant and newly incorporated companies.

We discharge this recommendation even though this is a perennial problem, probably exacerbated by companies not receiving reminders to file their accounts if they have not signed up to email reminders and because of confusion with the different HMRC requirements for companies registered as dormant with them.

Compliance is high on the Companies House agenda and various initiatives are being developed. Discharged.

No outstanding recommendations for 2022 to 2023.