The Government in conjunction with Companies House have announced that the filing deadline for company accounts can be extended with prior agreement by 3 months. This is designed to let companies prioritise their response to COVID19.
However, companies need to be mindful of the potential impact to their business of doing this:
If companies are seeking temporary finance then they will need their latest set of statutory accounts as part of the lending application. This is particularly relevant as many businesses are seeking short term finance to deal with the effects of COVID19.
The credit ratings of companies are effected by filing their company accounts very close to the filing deadline. These usually return to normal over a period of time once the accounts have been filed. It is unclear whether this extension will adversely impact credit scores. Similarly, suppliers will often review the latest set of accounts to assess the balance sheet value when setting credit limits – if recent accounts aren’t filed with Companies House it will limit their capacity to do this.
At this difficult time the advice of your accountant is critical to your business – understanding the financial position of the company and forward planning for tax payments and cash flow should be discussed with your accountant as part of your meeting to finalise your accounts. By extending your filing deadline you will be delaying these important discussions.
There may be other reliefs and grants available over the coming months which will be dependent upon the production of the statutory accounts.
Having read these health warnings, if you still wish to proceed with extending your deadline then you must apply, it is not automatic. Click here to do so.
Applications will take just 15 minutes to complete, but be aware you must apply before your accounts are due. Once your extension is granted please ensure you inform your accountant.