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The number of UK companies that filed 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 to their financial health.
Figures produced by Companies House show that a record fine of £34.4m was issued in 2023/24 to private companies that filed seriously late two years in a row, up from £10.2m in 2019-20.
The total number of companies fined the maximum £3,000 for repeated submissions more than six months late was 11,463 in 2023-24, compared with 3,418 in 2019-20.
Since the pandemic, companies have faced slower economic growth, higher borrowing and energy costs, and rising wages. “Companies that are struggling post-Covid have never gotten over it,” said Jonathan Dudley, a partner at accountancy firm Crowe.
More businesses were struggling to prove to auditors they had the financial strength to stay afloat as a “going concern”, Dudley said, contributing to delays in filing accounts.
Private companies are hit with fines from Companies House if they lodge their accounts late, with the money ultimately paid to the Treasury. Penalties range from £150 for those who 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 fallen significantly since the peak in 2021-22, but longer deposit delays have continued to rise.
In total, Companies House has collected £785.2m in fines from all private and public companies that have filed late accounts since 2018-19, according to a parliamentary question asked by Labor MP Phil Brickell.
Craig Beaumont of the Federation of Small Businesses said: “We know some small firms are heavily indebted with pre-pandemic trade debt and (Covid-era) loan repayments.
The Back Loan Scheme (BBL) was launched in May 2020. It targeted smaller businesses, offering loans of up to £50,000 – or 25 per cent of annual turnover – to help them stay afloat during the pandemic.
Dudley pointed out that the failure of “ghost companies” formed during the pandemic to receive turnaround loans may explain part of the increase.
Up to £47bn of recovery loans were issued, with no mandatory credit checks on borrowers. The government provided a 100 percent guarantee on loans if businesses were unable to repay.
The House of Commons Public Accounts Committee estimated in April 2022 that up to £17bn of recovered loans would never be recovered, with £4.9bn lost to fraud.
Brickell, a member of the All Party Parliamentary Group on Anti-Corruption and Responsible Taxation, said: “Companies Chambers must ensure that filing deadlines do not continue to be breached at the worrying rate we are currently seeing.”
A government spokesman said: “This government is committed to protecting the interests of taxpayers, which is why we have appointed a Covid Anti-Fraud Commissioner to review Covid spending.
“We will use every means possible to recover public money lost in pandemic-related fraud.”
