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Co House taking client to court

Co House taking client to court

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Had a new client come to me in June. Her accounts should have been filed by 31.12.2014 with Co House.
Her books were with her accountant who had become seriously ill anyway long story short she didn't want to add to his
Problems so had just got her books back from him.

I filed the late accounts along with 31.03.2015 on 10th July.

However today we have recived a summons taking client to court for failure to file by due date.

The statement was done on 2nd July showing they had t been filed but papers only issued now after filing is up to date.

She has never filed late before in 8 years of trading so concerned why they are seeking to prosecute her, I know they were late
But I have seen clients with several years missing and all that happened was they paid the fine and that was it.

She is only 6 months late so unsure why they have taking this stance with her or are Co House now taking a much tougher
Stance to drum up extra cash from small businesses

As anyone else had this problem.

Replies (25)

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By johngroganjga
14th Aug 2015 10:04

Client needs legal advice not accountancy advice, which I assume she is getting.

Companies House always threaten that their ultimate sanction is prosecution - quite reasonably so.  But it's a new one on me that they can prosecute for an "offence" of having filed late (if indeed it is an offence at all) rather than failure to file at all (which is of course an offence).

So the client needs to ask her solicitor what to do. 

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By carnmores
14th Aug 2015 09:59

what exactly does the summons say

what do they want?

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By Wanderer
14th Aug 2015 10:14

Only ever

seen this once before, an awful long time ago, probably pre late filing penalty regime. Think the director was fined something like £25-£50. From memory it was in the Cardiff magistrates court.

Be very interested if this was a new stance being taken by Companies House.

Edit, just found this:-

Quote:
As a last resort, directors can face prosecution for violating the rules. Companies House will prosecute directors who fail to file their accounts if they think its in the best interest of the public, and if there is sufficient evidence that the company was still “live” at the time of the offence. Nearly 2,000 directors were prosecuted for failing to produce accounts on time by Companies House last financial year, which prioritises resources to focus on offences where there has been persistent, repeated and willful non-compliance.

http://economia.icaew.com/business/april-2014/companies-late-filings

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By Glenn Martin
14th Aug 2015 10:15

@car mores
The offence is failure to file accounts by 31.12.2014

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By BananaMan
14th Aug 2015 10:46

Resolution

Glennzy wrote:
The offence is failure to file accounts by 31.12.2014

 

I think that he means they now have the accounts - what resolution are they hoping for? Surely the just levy the penalty and go away?

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By Jackie0802
14th Aug 2015 10:25

Appeal

Tell her to appeal to Co House.  If they had begun action just before the accounts were filed it may well be that the action gained momentum and had not taken the filed counts into consideration.  I have always found Co House to be understanding, if a little slow, so it is certainly worth a phone call followed by written explanation if necessary.

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By SoL
14th Aug 2015 10:26

Be interesting to know if this was a "first offence" or if there was a history of late filings in the past. It's a bit worrying if they're applying such a draconian response for a first late filing.

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By mwngiol
14th Aug 2015 10:28

Answer is in the question

SoL wrote:

Be interesting to know if this was a "first offence" or if there was a history of late filings in the past. It's a bit worrying if they're applying such a draconian response for a first late filing.

OP states that this is first late filing

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By bernard michael
14th Aug 2015 10:28

The main problem is this  I

The main problem is this  I believe this is a criminal offence and she will have a record if found guilty 

David am I right??! ( I hope not)

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David Winch
By David Winch
14th Aug 2015 10:42

Criminal offence

See s451 Companies Act 2006.

I suggest the client or accountant or solicitor write to Companies House pointing out that the accounts are now up to date, there has been no previous default, explaining the circumstances & saying directors took all reasonable steps to have accounts filed on time.

Then see if CH will stop the prosecution.

David

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By Glenn Martin
14th Aug 2015 11:04

How many times do they wish to punish her for same offence?

It is a small business earning about £25k per year. The £700 fine is surely punishment enough, but now she is going to have to take a day off work, troop down to Cardiff get fined again plus probably costs and criminal record. Surely treatment needs to be same for everyone I cannot help but feel she has been singled out.

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By bernard michael
14th Aug 2015 11:11

She would have received personally several reminders from Cos house containing the warning about prosecution unless she filed and offering her the chance of more time. Why did she ignore them ?

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By Glenn Martin
14th Aug 2015 11:41

She Didnt ignore them.

she spoke to them throughout and explained the problem she had.

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By mwngiol
14th Aug 2015 11:46

Maybe

Glennzy wrote:

she spoke to them throughout and explained the problem she had.

Maybe that was her mistake?

My experience, based purely on observation and no scientific basis I hasten to add, is that HMRC seem a lot stricter on people who arrange a time to pay arrangement and then miss one instalment, than they are with people who don't bother to contact them in the first place and who make no payments at all. Maybe Co House is working in a similar way?

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By JimLittle
14th Aug 2015 11:47

only three months late

There are thousands of cases where clients have not filed at all  They should go after them instead of wasting time for someone who filed which was only three months late and there were extenuating circumstances too.  Makes me very angry.  Just a waste of tax payers money. .

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By bernard michael
14th Aug 2015 11:55

The penalties are incurred when you file late for the "crime" of filing late - until then there is no fine

Also until you file Cos House don't know whether the co is trading or dormant so can't tell if it's worth chasing

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By johngroganjga
14th Aug 2015 12:07

Civil / criminal

bernard michael wrote:

The penalties are incurred when you file late for the "crime" of filing late - until then there is no fine

Also until you file Cos House don't know whether the co is trading or dormant so can't tell if it's worth chasing

This are the civil penalties levied automatically against the companies. But they are not what this thread is about. This thread is about an attempt by Companies House to have the court levy criminal penalties against the directors.

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By Glenn Martin
14th Aug 2015 12:21

Update

I have spoken with them and they have asked that I write to them explain what has happened and that file is now up to date and they MIGHT consider not progressing to court. hopefully common sense will prevail.

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By BananaMan
14th Aug 2015 12:50

Register

The only thing i can think is that, whilst the accounts have been submitted, they may not actually have made it onto the register?

 

Are they in the filing history for said client?

 

Because, obviously, this would result in Companies House believing - incorrectly or otherwise - that the accounts had not yet been filed

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By Glenn Martin
14th Aug 2015 13:11

Bananaman

They did all the statements etc on 2nd July. The record was brought up to date on 10th July. They have now issued proceedings 12th August for a court appearance of 3rd September. They obviously have not checked the record between doing the original statements and issuing the proceedings. I think only giving 3 weeks notice of court hearing is also a bit short considering its school holidays time. Hopefully it will be resolved without need for court hearings.

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By tracey2412
18th Aug 2015 18:49

Don't envy the situation

but would be interested in knowing how this turns out - if you feel obliged to share?

I have just picked up a new client - similar situation - they have also mentioned 'suspending prosecution if filed within 28 days' etc etc.

As far as I know, first 'offence' - seems heavy handed. 

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By Glenn Martin
18th Aug 2015 20:03

@tracy
I don't understand why they have taking this stance with her on first offence so to speak. I thought the usual treatment was to enter a striking out notice in to give the company the required chase to get things up to date. I fail to see in whose interest it would be to prosecute her.
I also fail to see how it's a criminal as opposed to civil matter.

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By norstar
02nd May 2017 13:08

Curious as to how this ended up?

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Replying to norstar:
By Glenn Martin
02nd May 2017 13:17

.

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Replying to norstar:
By Glenn Martin
02nd May 2017 13:16

I will PM you the outcome

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