Estimated Accounts

Does filing estimated accounts contravene Companies Act s414

Didn't find your answer?

Companies House appear to suggest that estimated accounts should be submitted to meet filing deadline. I have been advised I can not prepare estimated accounts as I cannot be associated with misleading accounts and the Director should not sign them under CA2006 s414. Surely if the note says they are estimated I am not misleading anyone? They will be amended in due course. I am advised I should wait till accurate accounts can be filed and client has to pay penalties. I have never come across estimated accounts before Companies House suggested it. Any thoughts welcome?

Replies (15)

Please login or register to join the discussion.

RLI
By lionofludesch
18th Jan 2018 14:15

I've never done it.

Nor considered it.

If the directors can't get the accounts prepared in nine months, they deserve the penalty.

Thanks (2)
Replying to lionofludesch:
Flag of the Soviet Union
By thevaliant
20th Mar 2018 20:51

On this one, I completely agree with you.

I don't even like the 'shorten a day' trick, but you can get a further three months, which is surely better than submitted estimated accounts?

Thanks (0)
John Toon
By John Toon
18th Jan 2018 14:34

I doubt very much that Companies House suggests directors break the law! I suspect that they may permit estimates in extenuating circumstances such as a fire destroying accounting records - I'm being generous here.

Directors have a legal requirement to only approve accounts that they believe to be true and fair - if they've guessed at the numbers to avoid a penalty it's unlikely they can comply with this.

Assuming you're a proper accountant then ethically I would avoid at all cost being associated with any such accounts and prepare for an ML report.

Thanks (0)
avatar
By Accountant A
18th Jan 2018 14:38

What are "estimated accounts"? That could cover a multitude of sins from complete fabrication/guesswork to appropriate considered, calculated and disclosed estimates on specific areas.

Which end are you talking about?

Thanks (0)
avatar
By Taxgirl
18th Jan 2018 14:53

Basically the creditors and P&L reserves cannot be quantified with 100 per cent accuracy at this stage. The director keeps adequate records but there appears to be confusion over prior year accounting by previous accountants which I am trying to resolve but it all seems to take time. The intention was estimated accounts stating clearly in the notes they are estimated and will be amended so cannot be relied upon. I understand the issue about being associated with misleading accounts and we are working on resolving the issue to ensure correct accounts are prepared and tax returns filed by the tax filing deadline. Companies House mention of filing estimated accounts with notes to that effect, to be later amended made we wonder if it was acceptable. Clearly the consensus is no. I have never filed estimated accounts so never considered the question before. I just don’t want someone turning round to me and saying you could have filed estimated accounts and avoided the Companies House penalty.

Thanks (0)
Replying to Taxgirl:
John Toon
By John Toon
18th Jan 2018 15:07

Not sure how the director keeps adequate records if the creditors can't be quantified? Presumably you will have last year's comparatives so unless there is an issue that needs to be resolved using a PYA I can't see why accounts can't be produced.

Of course, if you having a pressing filing deadline you could always play the game and change year end.

Thanks (0)
Replying to Taxgirl:
avatar
By Accountant A
18th Jan 2018 18:32

Quote:

Basically the creditors and P&L reserves cannot be quantified with 100 per cent accuracy at this stage.

Would amounts paid to creditors post the year end (9 months ago) not give a clue as to what was outstanding then?

Thanks (0)
avatar
By Taxgirl
18th Jan 2018 15:04

Thank you all for taking the time to respond at a busy time of year. I was clearly right to be sceptical and enquire into this further. I have taken advice and clearly you all agree with the advice I received that it should not be done. I shall contact Companies House to try to fully understand why they responded to that effect. Maybe I misinterpreted their email. Thank you once again for your responses on this matter.

Thanks (0)
Replying to Taxgirl:
ALISK
By atleastisoundknowledgable...
18th Jan 2018 17:41

Shorten the year-end date by 1 day, it will buy you 3 months (from the date that you change it, so do it the day before the accounts are due).

Thanks (0)
AS
By AS
19th Jan 2018 09:35

I would not file estimated accounts as it is unethical.

I had one potential client where the accountant was filing abbreviated accounts every year near the filing deadline. The balance sheet was identical to the comparatives so it looked like the company had been dormant and there was no disclosure to say these were estimated accounts. A few months later, he would file amended accounts with just the word "AMENDED" written on the cover page and no explanations or disclosures of what the amendment was.

I was amazed that the accountant was putting his full details in the abbreviated accounts. It was an ACCA firm.

Thanks (0)
avatar
By dottycatz
20th Mar 2018 17:19

We have also just been advised by Companies House to file "estimated" accounts and then once the final ones are complete file an amended set of accounts.

Thanks (0)
Replying to dottycatz:
ALISK
By atleastisoundknowledgable...
20th Mar 2018 21:02

Quote:

We have also just been advised by Companies House to file "estimated" accounts and then once the final ones are complete file an amended set of accounts.

That’s shocking. Did they say that in an email? I wonder whether that could be held as a defence if ot ended up in court.

Thanks (0)
Replying to atleastisoundknowledgable...:
Tornado
By Tornado
21st Mar 2018 09:40

This does fit in with the modern trend for tick-boxing where as long as the 'form' is filed on time, the content is irrelevant.

Shocking really but that seems to be how it is.

The same with MTD. As long as something gets sent to HMRC. the quality of the content will not matter.

Thanks (0)
Replying to atleastisoundknowledgable...:
avatar
By dottycatz
21st Mar 2018 16:28

I have been speaking with Companies House on a regular basis updating them it is only when I spoke with them yesterday and got a different person that they suggested filing estimated statements but were quite surprised that their colleague had not suggested it earlier. Companies House is just a repository for information - they don't check if it is correct. That said our accounts are correct we are just waiting on a particular piece of info before our auditors will sign off, we spoke with them regarding the advise that CH had given us and they did not have "and issue" with us following this course of action

Thanks (0)
avatar
By Taxgirl
20th Mar 2018 17:44

AS nothing surprises me any more. I’ve seen some poor accounting by qualified firms recently. Two professional bodies advised me not to file estimated accounts as they would be misleading. Companies House did reply to my query about the legality under the Companies Act but I chose to follow my professional Institute guidance. I have now prepared accounts with prior year adjustments and late filing fees will be charged. I guess it depends on your circumstances. I had to make significant adjustments to the prior year.

Thanks (0)