Most of us accountants are keen to make sure that you file your accounts on time. If you are a seasoned business owner, you will already know that if you file your accounts late you will receive penalties. But why else is it important to file your accounts on time?
You can review the full extent of the Companies House late filing penalties here
You need to know your tax liability
You need to know what profit you made and what tax to pay. It’s great to see that more and more of you are embracing Cloud Accounting which means you have access to real-time data.
You should know what your profit looks like for the year just finished and from there, it is straightforward to estimate a rough tax liability.
Clients are normally not taken by surprise when we tell them the tax liability. When cash is tight, they are more worried about how to pay that tax.
“Not everything that is faced can be changed. But nothing can be changed until it is faced”…James Baldwin.
Don’t allow the fear of payment to lead you into doing your accounts late. It’s crucial to determine your actual liability promptly to provide ample time for planning.
Similarly, there are massive benefits of submitting-your-tax-return-before-the-deadline, and doing your company accounts in plenty of time will matter. The two are connected.
It’s crucial for a company director to fulfil their duties.
As a director, you have assumed certain “fiduciary” responsibilities. These include acting responsibly and taking care of the Company and its stakeholders. Your duty as a director is supported by the Companies Act 2006 and Common Law.
Within those duties, you need to take reasonable care and exercise good judgment. Your duty also includes acting in the best interest of the company, and this includes filing your Accounts on time.
It’s important to remember that failing to file your accounts on time can be considered a criminal offense. Unfortunately, this can sometimes slip our minds. Every year, numerous directors are taken to court for not submitting their accounts.
This is particularly true for directors in larger organisations who may not be directly involved in the finance department. If you want to find out the full extent of your duties as a director have a look at this blog from companies house
The credit score of your company can be impacted if you file your Accounts late
When we speak to experts in the field of business lending, they are always pointing out that late filing is detrimental to the overall credit score of your business.
You need to make sure you keep your credit rating clean because, in the current economic climate, you never know when you would require extra financial assistance.
Whenever you submit your accounts to Companies House, credit agencies will take note of it. Failing to file your accounts on time will result in a deduction of points.
It’s important to mention that if your results have shown improvement from the previous year and your Balance Sheet is stronger, it’s advisable to file your Accounts early. Seeking funding? It’s best to file your Accounts promptly after the year-end.
This is because credit agencies will be looking to change your score for the better in view of a stronger Balance Sheet.
It’s important to understand that submitting your Accounts near the deadline can also have a negative impact on your credit score. Although your score usually returns to normal after filing, it will still be marked for a brief period.
Do you have a system in place to ensure that your accounts are consistently filed on time?
Companies House is now becoming less tolerant of late filing so the best advice we can give you is to make sure you file on time.
We are here to help if you need assistance with filing those accounts or confirmation statement. Have a look at how we work
It’s important to keep in mind that your Accounts should be filed 9 months after the year end, however, new companies may have different filing times, so it’s best to double-check.
To avoid missing deadlines, we suggest the following tips:
- Add a reminder to your diary for your Accounts filing deadline and confirmation statement due date. You can easily do this on your phone.
- Keep well-organised records. We recommend using cloud-based software like QuickBooks or Xero.
- Seek help from a reputable Accountant who can assist you and alleviate some of the pressure.
- Ensure you give your Accountant sufficient time to prepare and provide advice and support.
If you’re not currently working with us, you can find out more by visiting our website. www.myersclark.co.uk
If you’re already a client and have any questions or concerns, please reach out to your regular manager.