The Corporate Insolvency and Governance Act was passed on 25 June 2020, with many measures coming into immediate effect on Friday 26 June. It aims to relax the burden on businesses during the coronavirus outbreak, providing additional flexibility and allowing corporate bodies to focus on their operations in these unprecedented circumstances.
The Act:
- Temporarily suspends elements of insolvency law;
- Adds new corporate restructuring facilities to the existing insolvency regime
- Temporarily relaxes a number of requirements related to Annual General Meetings (AGMs)
Secondary legislation gives effect to a number of measures, particularly related to the relaxation of standard filing deadlines for documents that must be submitted to Companies House. Laid before Parliament as The Companies etc. (Filing Requirements) (Temporary Modifications) Regulations 2020, these temporary provisions came into effect on Saturday 27 June 2020. As it currently stands, the effect of these regulations will expire at the end of 5 April 2021.
Keep on top of filing deadlines
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This article focuses on these changes to filing deadlines and how they affect UK companies and LLPs.
Companies House filing deadlines
Where available, the extension to deadlines is automatic. Unlike the previous provisions allowing companies to defer submission of their annual accounts, companies do not have to apply for extra time to file. You should see revised due dates when you log into Inform Direct, which as ever will help you keep track of when key submissions are due.
Accounts filing deadlines
Most companies will be given an extra three months to file their accounts, although companies that have already applied for and received a three month extension from March to June 2020 will apparently not be entitled to this further postponement in their accounts filing deadline.
There are specific updated rules for public companies. Where the period allowed for a public company to submit its accounts to Companies House would ordinarily end after 25 March 2020 but before 30 September 2020, the filing period is extended to the earlier of:
- 30 September 2020
- 12 months from the end of your accounting period
Companies House have provided some detailed guidance for PLCs affected by this change.
For private companies, which would ordinary have nine months from the end of the relevant accounting period to file their accounts, the regulations apply a three month extension in most circumstances.
Example
XYZ Limited’s accounting year ended on 31 December 2019. As a private company, they have nine months following the end of the accounting year to file accounts with Companies House, so their accounts would ordinary be due by 30 September 2020. However, by virtue of the regulations, the company gains an extra three months to file. They must still submit their accounts by the revised deadline of 31 December 2020 or face the standard penalties.
We understand that companies that are waiting to be struck off, where the Strike Off action is currently frozen, have also received this filing extension.
Confirmation statement filing deadlines
In normal circumstances, companies and LLPs have 14 days from the end of their confirmation period (the interval covered by the confirmation statement, typically a year) to file the confirmation statement.
By virtue of the regulations made under the Corporate Insolvency and Governance Act, the period for filing the CS01 or LLCS01 form is temporarily extended from 14 days to 42 days.
Example
XYZ Limited’s last confirmation statement was based on a confirmation date of 20 September 2019, covering the preceding year. The company had 14 days to file with Companies House, with a deadline of 4 October. Let’s say they filed on 2 October, ahead of the deadline.
Companies House will next expect a confirmation statement made up to 20 September 2020, unaffected by the regulations. But the company will now have 42 days to file the CS01 form, meaning they now have until 1 November 2020. It’s still important to file by this revised due date.
Where the 14 day period for filing the confirmation statement has already expired, Companies House have confirmed to us that the new extension to 42 days will not be granted.
Event-driven filings and deadlines
Companies (and, as appropriate, LLPs) usually have 14 days from the date of various events to file relevant details at Companies House. These ‘event-driven filings’ cover such events as:
- A change in the company’s registered office address
- Movement of the location of statutory registers between the registered office address and a Single Alternative Inspection Location (SAIL)
- The appointment of new officers, reportable changes to officer details and the termination of their appointment (including directors, company secretaries and LLP members)
- Notification of new People With Significant Control (PSCs), reportable changes to existing PSCs and someone ceasing to be a Person With Significant Control
The regulations temporarily extend the 14 day period to 42 days, meaning companies have longer from the date of an event to submit details to Companies House.
Example
A new director is appointed to the board of XYZ Limited on 5 October 2020. In normal circumstances, form AP01 would need to be filed with Companies House within 14 days, by 19 October 2020. Despite the temporary easement, the form must still be submitted, but only within 42 days – so with an effective deadline of 16 November 2020.
While the extra time will be welcome in many cases, we’d always recommend filing as soon as reasonably possible after the event, in part so that the need to submit details to Companies House isn’t accidentally forgotten. Especially in the current environment, it would be easy to put the requirement to file aside and forget to return to it.
Mortgages and charges
There are strict legal requirements which relate to the registration of a mortgage or charge at Companies House, which is filed using form MR01. There is a standard deadline of 21 days to do so, beginning with the day after the date of creation of the charge.
Under the regulations, the 21 day deadline is extended by 10 days to 31 days.
Practical considerations
Overall, the extension of filing deadlines is good news. Many companies, working hard to re-orient their business in the age of coronavirus, will be glad of some extra flexibility.
However, we’d just recommend some caution to companies and their professional advisers:
- This is an extension of deadlines, not a removal of the requirement to file. It’s important to remember that companies and their directors can still face serious penalties for not filing by the (as amended) deadlines.
- As with any change, there is the potential for confusion. We are already aware, for example, of some emails going out incorrectly from Companies House where their systems are still to be updated.
- If you are comfortable with the standard timescales, there will rarely be harm in sticking to them. It may be least confusing, meaning companies still remember to make required submissions. Where their clients are easily able to provide the required information, accountants may – at least in some cases – find that it causes less disruption to stick to their existing procedures than educate clients about the temporary easements.
- Be careful not to mix up the different periods of extension. In particular, be aware that new mortgages and charges must be reported within 31 days rather than the 42 day period which applies to most other changes. That’s especially important given the potential consequences of failing to register a charge within the statutory period.
- This is a temporary set of measures, expiring at the end of 5 April 2021. Deadlines will not be extended next year if they fall on or after 6 April 2021. There could be vagaries at time of the transition back to standard filing deadlines.
For all of these statutory requirements, electronic filing – via a dedicated, comprehensive service such as Inform Direct – means you can submit the required details to Companies House instantly, rather than relying on the postal service to deliver forms on time.
