Top 5 Reasons Why Company Accounts are Rejected

Company Annual Accounts rejectedCompanies House have released figures showing that they now reject 11.1% of company accounts. Using the Companies House statistics for July 2012 that means over 300,000 companies have had their accounts rejected so far this year. If acceptable accounts are not received on time then Companies House will automatically levy late filing penalties. This could, therefore, be a costly process for these companies.

Companies House have now published the most common reasons why they reject company annual accounts. The top 5 are:

1)      Incorrect Statements to the Accounts – All company accounts have to have the correct wording on them. The exact wording depends on the age of the company and its size. If the wording is not correct the accounts can be rejected. 33,349 companies got their statements wrong last year.

2)      Duplicate Made up Date – The ‘made up date’ is the end of the accounting period that the annual accounts cover. This is normally the anniversary of when the company was formed. 17,329 companies had their accounts rejected for duplicating this date. This normally happens because they have re-used the previous year’s accounts and have forgotten to change the date.

3)      Signatory Name Missing off Balance Sheet – A company director has to sign the company balance sheet before the accounts are submitted. 12,106 companies forgot to do this.

4)      Audit exemptions statements missing or incorrect – Under the 2006 companies act small businesses can claim exemption from having their accounts audited. 10,277 companies failed to get the wording of their exemption correct or missed it entirely.

5)      Made up Date Missing or Incorrect – Whereas 17,329 companies managed to duplicate the made up date on their accounts, 10,026 companies managed to either miss it off all together or get it wrong.

Filing of company accounts is required for all limited companies whether they are trading or not. This has to be done every year and can be a considerable strain on resources for small businesses. Getting these accounts wrong and having to do them again is the last thing you need, especially as it opens you up to late filing penalties and a criminal prosecution.

Whilst the company directors are ultimately responsible for filing the accounts correctly you can offset some of the risk by getting a qualified accountant to create the accounts for you. An experienced accountant should be able to avoid the most common mistakes listed above and, if they don’t, should absorb any fines.

The Company Warehouse offer a range of accounting services including the preparation and filing of annual accounts starting from £14.99 per month.

2 comments on “Top 5 Reasons Why Company Accounts are Rejected

  • Hollie

    In reference to number 2)

    For all new companies, the legislation sets the first accounting reference date as the LAST DAY IN THE MONTH in which its first anniversary falls. The subsequent accounting reference dates will automatically be on the same date each year. For example, if the company was incorporated on 6 April 2008 its first accounting reference date would be 30 April 2009 and 30 April for every year thereafter.

    If accounts are “made up” to the date they were completed and not year end date already determined that is supposed to be on them, that is also wrong. If the Accounting Reference date is before or after what it is supposed to be, they will get rejected again.

    • Peter @ The Company Warehouse

      Hi Hollie,
      In most cases you are right, however there are two separate dates. The “accounting reference date” and the “made up date”. Accounting reference date, as you said is done from the end of the month when the company was first registered. The made-up date is the end of the accounting period.
      Companies can choose to ‘make up’ their accounts for the accounting reference date or for up to 7 days either side.
      This is outlined on the Companies House website as follows
      “The financial period ends on the accounting reference date. Companies have the choice to make up their accounts to the accounting reference date or a date up to seven days either side of it without filing an AA01 form, if this is more convenient”.
      There is also an option for companies to move their accounting reference date completely as long as it does not go past 18 months. Again if you did this the date on which the accounts were made up would be different from the anniversary of the company. More from Companies House on accounting reference dates –
      I have changed the wording of point 2 to try and make it a little clearer.



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