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The number of UK companies filing their accounts more than six months late in consecutive years rose last year, pushing fines to record levels as companies struggled to put the pandemic behind them and convince auditors of their financial health.
Figures produced by Companies House show that a record £34.4mn of fines were issued in 2023/24 to private companies filing seriously late two years in a row, up from £10.2mn in 2019-20.
The total number of companies fined the maximum £3,000 for repeatedly filing more than six months late was 11,463 in 2023-24, compared with 3,418 in 2019-20.
Since the pandemic, companies have been grappling with slower economic growth, high borrowing and energy costs, and wage rises. “Companies struggling post-Covid have never really gotten over it,” said Jonathan Dudley, a partner at accounting firm Crowe.
More businesses were struggling to prove to auditors that they had the financial strength to stay afloat as a “going concern”, said Dudley, contributing to the delays in filing accounts.
Private companies are hit with penalties from Companies House if they file their accounts late, with the money ultimately paid to the Treasury. The fines range from £150 for those that file within a month of the deadline, to £3,000 for those who file more than six months late in two consecutive financial years.
The number of £150 fines has dropped significantly since the 2021-22 peak, but longer filing delays have continued to rise.
In total, Companies House has collected £785.2mn in fines from all private and public companies who have filed accounts late since 2018-19, according to a parliamentary question asked by Labour MP Phil Brickell.
Craig Beaumont from the Federation of Small Businesses said: “We know that some small firms are heavily indebted with pre-pandemic commercial debt and [Covid-era] bounce back loans.”
The bounce back loan (BBL) scheme was launched in May 2020. It targeted the smallest businesses, offering loans of up to £50,000 — or 25 per cent of annual turnover — to help them stay afloat during the pandemic.
Dudley noted that non-filing by “ghost companies” formed during the pandemic to receive bounce back loans could explain some of the rise.
Up to £47bn of bounce back loans were issued, without mandatory credit checks for borrowers. The government provided a 100 per cent guarantee for the loans if businesses were unable to repay.
The House of Commons Public Accounts Committee estimated in April 2022 that up to £17bn of bounce back loans would never be recovered, with £4.9bn being lost to fraud.
Brickell, a member of the All Party Parliamentary Group for Anti-Corruption and Responsible Tax said: “Companies House must ensure that filing deadlines don’t continue to be flouted at the worrying scale we are currently seeing.”
A government spokesperson said: “This government is committed to protecting taxpayers’ interests, which is why we have appointed a Covid Counter-Fraud Commissioner to scrutinise Covid spending.
“We will use every means possible to recoup public money lost in pandemic-related fraud.”
