Avoid Having Companies House Reject Your Accounts

Companies House has reported a significant increase in its rejection rate for annual accounts and reports. This is partly due to failures to comply with new requirements under the Companies Act 2006.

The rejection rate is currently 11.1%. For smaller companies and Limited Liability Partnerships (LLPs) one of the biggest problems is a failure to include the correct statements in audit exempt accounts. The other mistake comes with accounts prepared under the ‘small companies’ or ‘small LLPs’ regimes, as different wording is required in accounts prepared under the new Companies Act. Many continue to use the wording that was required under the Companies Act 1985 and are finding that their accounts are being rejected by Companies House. Nearly half of the current rejections relate to problems over these statements.

Other significant errors include duplicate filling; missing names or signatures; and wrong accounting reference dates.

Another issue arises for companies and LLPs who deliver their accounts and reports close the filing date, thereby risking incurring significant penalties if their documents are rejected as a result of errors and omissions, as there may be insufficient time to correct and resubmit them before the due date.

The accounting requirements of the Companies Act 2006 apply to companies for accounting periods beginning on or after 6 April 2008 and to LLPs for accounting periods beginning on or after 1 October 2008. Where the directors of a small company, or the members of a small LLP, wish to prepare accounts under the small companies or small LLPs regime (or wish to take advantage of audit exemption) separate and appropriate statements must be included above the signature on the balance sheet.

Detailed examples of such wording, along with general help, can be found at http://www.companieshouse.gov.uk/about/pdf/commonAccountsRejections.pdf

Geoff Kew

Published on 24/09/2010