British companies are facing unprecedented penalties for delayed financial reporting, with fines reaching a historic £34.4 million in 2023/24 for businesses filing accounts more than six months late for two consecutive years. This marks a dramatic increase from £10.2 million in 2019-20, reflecting the ongoing challenges businesses face in the post-pandemic landscape.
The scale of the crisis is evident in the numbers, with 11,463 companies receiving maximum £3,000 fines for severe reporting delays in 2023/24, compared to just 3,418 in 2019-20. These figures paint a stark picture of organisations wrestling with elevated borrowing costs, soaring energy prices, and mounting wage pressures.
Jonathan Dudley, a partner at accounting firm Crowe, observes that many companies have struggled to recover from the Covid-19 impact. A significant challenge lies in convincing auditors of their financial viability as “going concerns,” contributing to these reporting delays.
The Companies House penalty system operates on a sliding scale, beginning at £150 for submissions up to one month late, escalating to £3,000 for repeated serious delays. Since 2018-19, the Treasury has collected £785.2 million in late filing penalties from both private and public companies.
The Federation of Small Businesses highlights the burden of pre-pandemic commercial debt and Covid-era bounce back loans weighing heavily on small enterprises. The bounce back loan scheme, which distributed up to £47 billion without mandatory credit checks, has left a concerning legacy. Government estimates suggest up to £17 billion may never be recovered, with £4.9 billion potentially lost to fraudulent activity.
Labour MP Phil Brickell, representing the All Party Parliamentary Group for Anti-Corruption and Responsible Tax, has called for stricter enforcement of filing deadlines. The government maintains its commitment to protecting taxpayers’ interests through the appointment of a Covid Counter-Fraud Commissioner to scrutinise pandemic-related spending.
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