Corporate report

Companies House independent adjudicators' report, 2019 to 2020

Published 9 November 2020

Introduction

Companies House has 3 Independent Adjudicators: Dame Elizabeth Neville, Mr Leslie Cuthbert and Mrs Jessica Pacey. Our principal role is to deal with third stage appeals against late filing penalties imposed on companies and limited liability partnerships which have filed their accounts after the filing deadline.

Cases where appellants wish to pursue their appeal, having passed through the first 2 stages of the appeals process which are internal to Companies House, are referred to us. If an appeal is not upheld by an Independent Adjudicator, the appellant may appeal to the registrar who is the final arbiter in the appeals process.

The Independent Adjudicators also consider complaints made against Companies House. Again, there are 2 internal stages for consideration of a complaint. If the complainant is dissatisfied with the outcome of the internal consideration of the complaint, they may ask for the matter to be referred to an Independent Adjudicator.

A complainant who remains dissatisfied after consideration of their case by an Independent Adjudicator may approach a Member of Parliament and ask for the matter to be referred to the Parliamentary and Health Service Ombudsman.

We are entirely independent of Companies House. We do not work at Companies House and we are all occupied professionally in other spheres. A brief outline of our professional profiles may be found on the Companies House website.

Our cases, whether appeals against late filing penalties or complaints, are allocated by rotation to ensure their random distribution. We do not give out our personal postal or email addresses to protect our privacy and security. We use the Companies House address for postal communications and we each have a Companies House email address.

We have made 12 recommendations which are set out in Appendix A, 4 of which are repetitions of recommendations made in the previous year (Appendix B). Action has been initiated on some of them. Disappointingly, one recommendation from 2015-2016 (Appendix C) is still outstanding.

Appeals

Numbers of cases and types of company

Companies House imposed 179,916 late filing penalties between 1 April 2019 and 31 March 2020. Appeals were made in 26,502 cases, of which 3,320 (12.5%) were allowed at the first or second stage of the appeal process. 329 appeals were considered by the Independent Adjudicators, broadly similar to last year, and 1.24% of the total appeals received. (See Table 1).

Table 1 - Number of appeals considered by Independent Adjudicators

	2011-12	2012-13	2013-14	2014-15	2015-16	2016-17	2017-18	2018-19	2019-20
Total	583	466	391	305	306	329	267	337	329

We continue to be concerned about the number of appeals which we receive from newly incorporated companies and from dormant companies. A good number of companies which do not trade in their first year fall into both categories. The Independent Adjudicators considered appeals from 105 non-trading companies (32% of the appeals we considered).

There seem to be several reasons why dormant accounts are not filed on time. One is that a dormant company is simply not in the forefront of directors’ minds and another is the belief that dormant companies do not have to file accounts, even though the filing reminders, both electronic and sent by post, say that they do. The fact that HMRC may not require accounts from a dormant company leads some directors to think that the same applies to Companies House.

Seventy-seven (23%) of the appeals we received related to a company’s first accounts. Companies House sends all newly appointed directors a New Director Letter at the time of appointment. This is often at the time of incorporation which means that it will be 21 months before the accounts have to be filed and many directors do not seem to take in the requirement.

Last year we recommended that Companies House consider what more might be done to obtain better compliance from companies filing their first accounts and from dormant companies. Examples of what might be done were the placing of a red warning flag on reminder letters and emails sent to companies filing their first accounts or which filed dormant accounts in the previous year. Companies House is engaged in a major change programme which means that developments of this kind have not been progressed and to some extent they have been overtaken by events.

We are aware that Companies House is considering abolishing sending reminder letters through the post and only sending reminders by email. A trial is currently underway. We recommend that Companies House considers how compliance by dormant and newly incorporated companies might be improved, given their already disproportionate lack of compliance and in the light of future potential developments. One suggestion is to enclose an impactive document about filing requirements with a company’s incorporation documents.

Referrals to the registrar

The fourth and final stage of the appeals process is an appeal to the registrar. In 110 (33%) of the appeals considered by the Independent Adjudicators, a further appeal was made to the registrar (see Table 2). The registrar did not uphold any appeals.

In nearly all cases, the appeal to the registrar repeats the contents of the prior appeals, without any new information, and the registrar rarely reaches a different conclusion from the Independent Adjudicator.

Table 2 - Referrals to the registrar

	Number of cases escalated to registrar	% of total cases dealt with by Adjudicators
2007-08	22	37
2008-09	27	23
2009-10	68	20
2010-11	109	22
2011-12	120	21
2012-13	112	24
2013-14	85	21
2014-15	68	22
2015-16	62	20
2016-17	64	16
2017-18	86	32
2018-19	140	42
2019-20	110	33

The registrar partially upheld one appeal, acknowledging that errors were made by Companies House and the penalties were reduced to reflect this.

Upheld appeals

We upheld or partially upheld 18 (the same number as last year) or 5.5% of the 329 appeals which we considered. We made a number of recommendations and Companies House has already taken action on some of them. See Appendix A.

Death, incapacity, health grounds and other exceptional circumstance

8 appeals upheld.

We received 145 (44%) appeals based wholly or in part on the grounds of exceptional circumstances. It is the largest category of grounds for appeal. 67 (46%) of these appeals were on the basis that a director, usually the sole director, was suffering from a serious illness, either physical or mental.

Last year we upheld 10 appeals on the grounds of death, incapacity or ill health, finding that the general requirement of Companies House that an illness or injury must have occurred shortly before the filing deadline before an appeal can be allowed may sometimes be inappropriate.

Companies House has reviewed its approach to appeals in cases of death, physical and mental incapacity and mental illness which would have made it unreasonable to expect that the accounts should have been filed on time. We have seen few such cases this year and surmise that it is because Companies House is allowing such appeals at an earlier stage. We upheld one such appeal.

Appeal 1

The director of the company was affected continuously from the time of the sudden unforeseen illness of his wife, followed by her death, until the filing deadline.

We upheld 7 further appeals on the grounds of exceptional circumstances.

Appeal 2

In one case, the sole director of the company was faced by a series of unforeseen events in the period running up to the filing deadline, which cumulatively were overwhelming and placed him under intolerable stress, resulting in the late filing of the accounts.

Appeal 3

The sole director of this company was arrested and not granted bail. He was remanded in custody, which he could not have anticipated. He was unable to file the accounts from prison.

Appeal 4

In another case, the sole director had been excluded from her home and the company’s registered office address by family members and had no access to paperwork or the company’s authentication code. She was homeless and had no address to which she could change the company’s registered office. She notified Companies House of the situation but Companies House continued to send notices to the company’s registered office as it is required to do by statute.

Companies House does not appear to have a system for forwarding copies of documents to an email address in circumstances of this nature. The director had no way of knowing that Companies House had started dissolution action. The director had informed Companies House of her difficult situation and it should have been more responsive. We have seen similar cases where directors face difficulties when made homeless or excluded from premises. The Adjudicators ask Companies House to consider if a mechanism could be developed for exceptional cases where directors inform them that they are unable to receive postal communications.

The director was not informed that the accounts could be filed in paper form. If she had been, the accounts could have been filed sooner.

When the director contacted Companies House on 1 April 2019, the action to dissolve the company should have been halted, as she was expressing an intention to file the accounts. This is not the first time we have seen this error. We recommend that Compliance Teams are reminded of when it is appropriate to suspend dissolution action.

The first response to the appeal contained an error and when this was pointed out by the appellant, the reply perpetuated the error and would have given offence. We recommended that the author be given advice. We make a wider recommendation about the quality of the responses to appeals.

Appeal 5

A company suffered a computer failure three days before the filing deadline, at the same time as the director became ill for a week and the company had to move premises at very short notice. The Adjudicator upheld the appeal.

Appeals 6 and 7

Two companies had faced extremely difficult circumstances which made it impossible for the accounts to be filed by the deadline. In both cases they were victims of crime. One company is a charity and the director with responsibility for filing the accounts, who was also the chair of the trustees, refused to provide any accounting information. He is the subject of a police investigation into an allegation that he had stolen a large proportion of the company’s assets.

In the second case, the legal representative of the 14 companies concerned had removed the directors and substituted unknown parties. He had been sentenced to a term of imprisonment and struck off as a solicitor for offences against linked companies. It had not been possible to file the accounts for some time. Companies House had taken a view in both cases that what had happened was a dispute amongst directors but the Adjudicator considered that it was much more than that, that the circumstances were exceptional and upheld both appeals.

In one of the cases, the quality of the reply to the first letter of appeal was poor. This is the subject of a wider recommendation later in this report.

Appeal 8

The circumstances of this appeal were unusual in that the exceptional circumstances did not relate either to the director or the company. The secretary of the company, which was a residents’ association for a block of flats, had taken full responsibility for filing the accounts. She was facing the unpleasant consequences of having filed them late due to her severe mental illness and the imposition of a penalty which she expected to have to pay personally, which she could not afford because she could not work. She had attempted suicide in the recent past and twice been hospitalised.

Whilst the legal responsibility for filing the accounts rested with the director and not the secretary who was the appellant, the Adjudicator considered that the secretary was a vulnerable person and recommended that the penalty should not be collected out of concern for the potential impact on her of rejecting the appeal.

During this appeal, there was a failure to place a hold on recovery action, resulting in the appellant receiving a letter from the debt recovery agents retained by Companies House. This commonly occurred in the early part of the year, but following Companies House action, there was a noticeable reduction. A recommendation about placing holds on recovery action while an appeal is ongoing is made later in this report (2.46 ). The remedial action taken by Companies House is described in Appendix A.

Companies House contributed to the delay in filing 8 appeals upheld (One also upheld for other reasons)

Appeals 1 and 2

The Adjudicators upheld 2 cases where the directors had emailed Companies House about the overdue accounts but were not told by Compliance staff that they did not need to wait to receive the authentication code and that the accounts could be delivered in paper form. If they had received that advice, they would have had the opportunity to file the accounts before the penalty rose to the next band. In one case, the appeal was fully upheld for other reasons. In the other case, the Adjudicator recommended that a penalty in a lower penalty band be collected.

This had been the subject of a recommendation by the Adjudicators in 2018/2019 (Appendix B), which seems to have resolved the problem as far as the Contact Centre is concerned. We repeat the recommendation that advice is given to Compliance staff to inform callers who are struggling with WebFiling, or who do not have the authentication code, that accounts can be filed in paper form, in order to enable them to file sooner and avoid a penalty or an increased penalty.

In one of the cases, there were weaknesses in the replies from the Late Filing Penalties staff. As well as appealing, the appellant tried to change the company’s registered office address by email but was not told by the compliance case officer that a form AD01 must be submitted.

In another rejected appeal, the appellant’s request to change the company’s registered office address was ignored and she would not have known that it had not been updated. Feedback has been given to relevant staff. These failings for both the Compliance Team and the Late Filing Penalties team are the subject of a later recommendation and were the subject of a recommendation in our 2018-19 Annual Report.

Appeal 3

A director was trying to file her accounts electronically but could not do so. She sought help but she was not told that the accounts for her company could not be filed electronically. By the time she was told, the amount of the penalty had risen to the next level. If she had been told earlier, she could have filed the accounts while the penalty was at a lower level. The Adjudicator determined that, whilst the company was liable to a penalty, Companies House had contributed to the delay in filing and the lesser penalty should be collected.

Appeal 4

The accountant for the company attempted to file the accounts electronically on the day of the filing deadline, but no Companies House services were available due to a planned shutdown which had been publicised on its website and elsewhere. The accounts were filed once the systems were operational again, which was after the deadline.

Companies House took the view that, as notice had been given, the penalty should be collected. The Independent Adjudicator upheld the appeal because the accountant had been unaware that it would not be possible to file the accounts. The Adjudicator recommended that Companies House considers how companies trying to file accounts during a planned or unplanned shutdown may be assisted where the filing deadline is about to elapse.

It was suggested that consideration be given to placing advice on how to apply for a short extension on the announcement on the Companies House website. As long as the application is received prior to the deadline, it can be considered.

Appeal 5

A third case related to the rejection of the company’s accounts. They were first submitted after the filing deadline, so the company was liable to a penalty, and then rejected 4 times before they were accepted, during which period the amount of the penalty increased by £750. Although this was not the grounds for the director’s appeal, the Adjudicator identified that the accounts had been presented in the same incorrect form the previous year and had been accepted for filing.

The company should not have been penalised for presenting the accounts in the same form as the previous year. In addition, a signature was missing from the accounts and so they were correctly rejected on the first occasion. This was remedied on the second submission. The Adjudicator found that the penalty which should be collected was the amount to which the company would have been liable if the accounts had been accepted at the time of their second submission.

The Adjudicator found that the document examiners had made errors for 6 of the 7 sets accounts for this company which had been presented in 2017, 2018 and 2019, either wrongly accepting them or sending incomplete rejection letters.

The Adjudicators dealt with another case where the appeal was not upheld but the rejection letter did not give the correct reason for rejection. The Adjudicator asked for feedback to be given to the document examiner which we are told was done.

It was recommended that Companies House looks into the quality of the work of the document examiners and whether they are adequately supervised.

Appeal 6

One appeal was partly upheld because Companies House had made an error in placing the accounts of a parent company on the record of a subsidiary company. The Adjudicator recommended that a date adjustment be made. The appeal against the late filing penalties imposed on the 118 subsidiary companies was not upheld. An appeal was made to the registrar who partly upheld the further appeal.

Appeal 7

Two written requests for an extension to the company’s filing deadline were not acted upon. The Adjudicator formed no view on whether the request would have been allowed or not if the request had been considered. The appeal was upheld because, if the request had been allowed, no penalty would have been incurred.

Appeal 8

The Adjudicators received 2 appeals about difficulties experienced by directors filing dormant company accounts (DCA) online. A certain section is not self-explanatory to people without an accountancy background and the help box adds to the confusion. One appeal was upheld and the other was not, due to other circumstances. It is likely that many calls are made to the Contact Centre for assistance in completing DCA accounts online, particularly the identified section, and that an improvement would help reduce the numbers of calls on this topic.

The Adjudicators recommended that Companies House reviews the WebFiling screen entitled ‘(AA02) Dormant Company Accounts (DCA)’ to make it more user friendly and, in particular, the entry for ‘Called up share capital not paid’ together with the underlying advice. Companies House has reviewed the screens and the outcome is reported in Appendix A.

One of the appellants complained about the DCA video he found on YouTube. It was an out of date version which does not reflect what the user will now see. It was placed there by another organisation and Companies House is writing to ask them to take it down.

In the past, Companies House produced guidance videos which could be viewed on its website and on YouTube taking viewers step by step through filing accounts. These videos became out of date and have been withdrawn. Companies House intends to roll out new versions in late 2020.

Problem with or catastrophe affecting accountant or third party

Three appeals upheld.

Appeal 1

The accountant for 4 companies had been unwell but he did not know how ill he was and expected to recover. He had assured clients that their accounts would be filed. He then became seriously ill and died soon afterwards, and all the accounts were filed late. The Adjudicator took the view that these were sudden and unexpected circumstances which affected the companies immediately before the filing deadline.

Appeal 2

The appeal against the late filing penalty was based on the fact that the previously reliable accountant had disappeared shortly before the company’s filing deadline. The Adjudicator accepted that the director had no reason to suppose that the accounts would not be filed on time and that it was likely that a disaster befell the accountant in the 3 weeks before the filing deadline.

Appeal 3

In the third case, the director was unaware that the long term and previously reliable accountant had become seriously ill shortly before the filing deadline.

Other observations and recommendations

In the course of considering the appeals, both we and appellants identify matters which have not gone well or would benefit from improvement, even if the appeal has not been upheld. We draw them to the attention of Companies House in the interests of better customer service and improved compliance. Some of the matters which we identified were also the subject of complaints made in the course of appeals. Companies House has already taken action on some of our observations and recommendations. See Appendix A.

No hold placed on recovery proceedings while appeal in progress

We had recommended that action be taken on this problem in both our 2017-18 and 2018-19 annual reports but appellants regularly continued to report this. In 2 cases court action had been initiated. Three complaints were made, all of which we upheld.

Companies House took action (see Appendix A) and the number of cases fell away, but the problem did not cease entirely. We made the following recommendation: We urge Companies House to take steps to ensure that a hold is put on recovery proceedings while an appeal is in progress. It is at best an irritation to appellants and at worst upsetting and distressing. We will continue to monitor the problem.

Filing of micro-entity accounts

It is not uncommon for appellants to start the process for filing micro-entity accounts electronically but to fail to complete it. When they reach the screen where they can print the accounts, they assume that the process is complete and do not carry on to submission. We do not uphold such appeals. The same problem previously applied to electronic filing of Dormant Company (DCA) Accounts and some simple changes were quickly made to the screens. We are no longer seeing such cases for DCA accounts.

We recommend that improvements be made to the WebFiling screens for micro-entity accounts to help users complete the submission process. We are told that changes are to be made with a view to improving the situation. See Appendix A.

Improve E reminder

Companies may opt to receive reminders by email instead of through the post and Companies House may phase out written reminders. A trial is running at present. Two appellants complained about the contents of the E-Reminder.

The current electronic reminder does not have a clear link to advice on what to do if there is a problem filing the accounts on time, nor does it provide information that penalties increase with the period of delay. We have commented on this previously and Companies House accepted this a year ago. The user has to click on the following not obvious link to discover that an extension can be applied for, and then on a further link to the amount of the penalty scales: How to file accounts and avoid a penalty.

We recommend that the E-Reminder provides clearer information on what to do if there is a problem filing the accounts on time and advises that late filing penalties increase with the period of delay.

Quality of letters from compliance and responding to appeals

We identified that some replies from the Compliance Team are formulaic and less than helpful when help or advice is sought prior to filing the accounts. The standard reply from the Scottish office to communications expressing an intention to file overdue accounts is less informative than the one sent from the Cardiff office.

We found that a good number of replies to appeals from Late Filing Penalties at the first stage are poor. There is an over-reliance on standard paragraphs instead of tailoring the reply to the actual grounds for appeal.

Sometimes, the grounds for appeal are not properly addressed or not addressed at all. Paragraphs are inserted into replies which are inaccurate, superfluous, irrelevant to the appeal or simply wrong, in the light of what the appellant has said. Careless errors are made. The tone of the letters is sometimes condescending. When we identify a particularly poor response, we draw it to the attention of the Senior Casework Unit (SCU), so that the author may be given guidance.

These practices lead to recipients feeling that their appeal has not been given proper consideration and diminish the credibility of the process. Appellants often comment negatively on the response they have received. The Adjudicators question whether there is adequate supervision to identify poor letters and provide appropriate feedback to the authors.

We commented last year about replies from both the Compliance Team and the Late Filing Penalties Team. Over some years now, we have commented on some standard sentences in replies which we think are not clear to appellants and have asked for a clearer explanation to be provided of the limited ability of the registrar to decide not to collect a penalty. We were told by Companies House that a programme of work was under way to improve both the contents of standard letters and the quality of individual letters to ensure that they are relevant and use language which is accessible and meaningful to the non-professional filer.

All staff in Compliance and Late Filing Penalties have received a training course on written communication. Further work was delayed due to coronavirus priorities.

We repeat our recommendation from last year that Companies House improves the quality of its responses both to appeals and from the Compliance Section, including the Scottish and Northern Ireland offices. Companies House is to initiate a programme of work to improve its quality of correspondence. See Appendix A.

It is not uncommon for it to be apparent during the course of an appeal that a telephone call has been made to Companies House but that no steps were taken at an early stage to obtain the information required to retrieve a recording of the call. By the time the request is made, either by the Senior Appeals Unit or the Independent Adjudicators, the recording retention period may have elapsed and the appellant’s account of the advice received cannot be verified or discounted. We recommend that telephone recordings be retrieved at the earliest opportunity.

Complaints

One complaint was referred to us at the third stage of the complaints process. It is summarised below.

A former employee complained that a form (SH03, Return of Purchase of Own Shares) had not been delivered to Companies House within 28 days, which is a criminal offence. Companies House had decided not to prosecute the company as the form had been filed, albeit late. The Adjudicator determined that it was not within her remit to consider the prosecution decision.

Companies House failed to respond to the initial complaint for which it apologised. The initial response was extremely tardy and this had also been acknowledged by Companies House. A further delay in replying was caused by appropriate action to refer the matter to the Companies House legal team. The complaint was not upheld in view of the apologies already made by Companies House.

Complaints made within Appeals

Thirteen complaints were made in the course of an appeal against a late filing penalty. In some cases, the complaint was about more than one issue.

A number of the complaints related to the failure to place a hold on recovery proceedings while the appeal was in progress (3), about the screens for filing micro-entity accounts (1) and the content of the letters received in response to their appeal (2). They have been dealt with in the section above entitled ‘Other observations and recommendations’ and are not listed here, unless there were other complaints.

Complaint 1

A complaint was received from a Community Interest Company (CIC). Companies House had rejected the accounts submitted shortly before the deadline, had rejected them and posted them back to the company but they were not received. The complaint was that the rejected accounts had not been posted but had been lost at Companies House. There was nothing to support this.

A second complaint was that a hold had not been placed on action to recover the penalty and that court action had been initiated. This complaint was upheld.

The third complaint was that the Independent Adjudicators are not independent because Companies House can choose what to send to the Adjudicator and the appellant’s case cannot be properly heard. The complaint was not upheld.

It is not uncommon for appellants to raise concerns about our independence. When a case is referred to the Independent Adjudicators, all correspondence is passed to us, including any representations an appellant may wish to make to the Adjudicator. The Adjudicators have never had any cause to doubt the integrity of the staff at the Senior Casework Unit (SCU) who manage the process for us. The appellant can ask for a copy of what has been sent to us. See paragraph regarding our independence.

Complaint 2

A good many things went wrong in the handling of this appeal. A hold was not placed on collection action while the appeal was being considered and court action was initiated.

There was an excessive delay (44 days) in replying to the director.

Two responses by Companies House to the appeal were sent to the email address of the company’s book-keeper, who had made contact prior to the filing of the accounts. These emails were not received by the director. Emails from staff considering appeals are sent to the Companies House Contact Centre from where the email is forwarded to the ultimate recipient.

The system automatically picks up the original email address in the email thread but it should be checked before the email is sent. This is where the error occurred. The director asked twice for proof that the initial email from Companies House had been sent. The first request was not met. On the second occasion, an apology was made for not sending it before and a copy provided but, unfortunately, this email was sent to the book-keeper’s email address and not to the director.

This complaint was upheld in its entirety.

Complaint 3

The appellant complained about the way in which his appeal had been handled by Companies House. He objected to the tone of the correspondence. The Adjudicator found that all the communications from Companies House about the appeal had been courteous and sympathetic to the appellant’s serious health problems and explained clearly why his appeal could not be allowed. The complaint was not upheld.

Although not part of the complaint, the Adjudicator identified that the first 2 responses from Companies House were inaccurate: firstly assuming that the appellant was a director which he was not and secondly, it was said that a reminder letter had been sent by post whereas it had been sent by email, which caused confusion to the appellant. See our recommendation.

Complaint 4

In a partly upheld appeal, a complaint was also made that Companies House had undertaken to listen to the telephone call made by the appellant prior to making a decision on her appeal. Companies House was not able to trace the recording, but the appellant was not advised of this. She was issued with a payment schedule without explanation. No reply was made to a question she had asked. This part of the complaint was upheld.

A further complaint about the wording of an email was not upheld.

Complaints 5 and 6

Two complaints were made about how the complainants were dealt with on the telephone, but neither was upheld.

Complaints 7, 8 and 9

Complaints were made about having been treated in a discriminatory manner, allowance not having been made for a director’s condition which could amount to a disability and allowance not being made for an appellant’s dyslexia. None were upheld.

Conclusion

In the last year, Companies House has gone through extensive change and considerable work pressure as part of its extensive transformation programme. There has been no continuity of senior management in the Late Filing Penalties Appeals area of work, with key staff being in place for a matter of months before moving on promotion or to new opportunities. On a positive note, changes and improvements to appeals processes have been made. Work on quality issues was delayed but is now firmly in hand.

In the past, Companies House has been responsive to our recommendations which are often actioned in year, although this year there are some recommendations from last year which are outstanding or only partially complete and one outstanding recommendation from 2015-2016. We are pleased that all outstanding actions have now been completed. Commendably, Companies House constantly strives to identify and improve aspects of appeals handling which are working less well.

We repeat our observation of last year on the open approach of those dealing with appeals and the desire to treat appellants fairly and to put matters right where they have gone wrong.

We find ourselves in exceptional circumstances. The normal running of Companies House has been disrupted by the coronavirus pandemic. We accept that this will have an impact on the initiatives planned for 2020-21, including on implementing our recommendations.

As always, we appreciate the excellent support which we receive from The Senior Casework Unit.

Appendix A

Summary of recommendations 2019-2020

We recommend that Companies House considers how compliance by dormant and newly incorporated companies might be improved, given their already disproportionate lack of compliance and in the light of future potential developments. Under consideration as part of the reminder email pilot.

The Adjudicators ask Companies House to consider if a mechanism could be developed for exceptional cases where directors inform them that they are unable to receive postal communications.

We recommend that Compliance Teams are reminded of when it is appropriate to suspend dissolution action. This has been actioned and a monthly review meeting is now in place. Complete.

Recommendation that advice is given to Compliance staff to inform customers who are struggling with WebFiling or who do not have the authentication code that accounts can be filed in paper form in order to enable them to file sooner and avoid a penalty or an increased penalty. This has been actioned and a monthly review meeting is now in place. Complete.

The Adjudicator recommended that Companies House consider how companies trying to file accounts during a planned or unplanned shutdown may be assisted where the filing deadline is about to elapse. It was suggested that consideration be given to placing advice on how to apply for a short extension on the announcement on the Companies House website. As long as the application is received prior to the deadline, it can be considered.

It was recommended that Companies House looks into the quality of the work of the document examiners and whether they are adequately supervised.

The Adjudicators recommended that Companies House reviews the WebFiling screen entitled ‘(AA02) Dormant Company Accounts (DCA)’ to make it more user friendly and, in particular, the entry for ‘Called up share capital not paid’ together with the underlying advice. Companies House advises that the field ‘Called up share capital not paid’ must remain, as it is an accounting term. The help text was updated in May 2020 and provides clearer advice. Complete.

We urge Companies House to take steps to ensure that a hold is put on recovery proceedings while an appeal is in progress. It is at best an irritation to appellants and at worst upsetting and distressing. Companies House identified a number of issues causing this problem, one relating to a system issue. Work has been done with staff who must now log their actions. Discussions also took place with the debt recovery agents. Companies House has now changed its debt collector and this problem was fed into the transition project to ask for an audit trail to be included as part of the new functionality. Complete.

We recommend that improvements be made to the WebFiling screens for micro-entity accounts to help users complete the submission process. Work is in progress to change the prominence and positioning on the screens.

We recommend that the E Reminder provides clearer information on what to do if there is a problem filing the accounts on time and advises that late filing penalties increase with the period of delay. We are advised that this information is now provided. Complete.

We repeat our recommendation from last year that Companies House improves the quality of its responses both to appeals and from the Compliance Section, to include the Scottish and Northern Ireland Offices. A programme of work was scheduled to take place during 2020 to improve both the contents of standard letters and the quality of individual letters to ensure that they are relevant and use language which is accessible and meaningful to the non-professional filer. It is to include consideration of a clearer way to express the limited discretion of the registrar. Delays have incurred due to the pressures caused by Covid-19 but improved quality control is now in place.

We recommend that recordings of telephone calls be retrieved at the earliest opportunity. Case workers have been advised to retrieve recordings of calls from the Contact Centre when reviewing an appeal. The storing of calls relating to an appeal forms part of an ongoing project to storing all Late Filing Penalty related work. Complete.

Appendix B

Summary of recommendations 2018-2019

We recommend that Companies House considers what more might be done to obtain better compliance from companies filing their first accounts and from dormant companies. Further recommendation made in the current report. Complete.

We recommend that Companies House reviews its approach to appeals in cases of death, physical and mental incapacity and mental illness in determining what amounts to an exceptional circumstance which would make it unreasonable to expect that the accounts should have been filed on time. Companies House has altered and improved its approach. Complete.

We recommend that Companies House takes appropriate steps to improve access for callers to its Contact Centre. Companies House now has a separate team dealing with dissolution queries which has freed up other call handlers. Our attention has not been drawn to a problem this year. Complete.

We recommend that advice is given to Contact Centre and Compliance staff to inform callers who are struggling with WebFiling that accounts can be filed in paper form and also to tell them if the deadline is imminent or, where accounts are already overdue, when the liability to a penalty is about to rise to the next penalty band. Feedback has been given to Compliance staff. This has now been included in the scripts for contact centre staff. Numerous reminders have been issued. The recommendation is repeated for 2019-2020 for Compliance staff. Complete.

We recommend that Companies House improves the quality of its responses both to appeals and from the Compliance section and specifically that it develops a clearer way to explain the limited discretion of the registrar not to collect a penalty. This is the subject of a repeated recommendation for 2019-20. Complete.

It is recommended that Companies House considers clarifying within its Complaints Policy that the Independent Adjudicators cannot consider challenges to Companies House policy. The complaints procedure has now been made clearer on the Companies House website. When dealing with a complaint, Companies House now provides further guidance on what types of complaints the Independent Adjudicators will investigate. Complete.

We recommend that Companies House renews its action to reduce the likelihood of failing to place a hold on collection action while an appeal is ongoing. The recommendation is repeated for this year. Complete.

Appendix C

Outstanding recommendation 2017-2018

We recommend that when guidance videos on how to file DCA and micro-entity accounts become available, users should be signposted to them, both on the website and when they call the Contact Centre.

Guidance videos on how to file accounts were withdrawn as they were out of date and incorrect. Due to lack of resource, it has not been possible to produce new versions but their value to customers is fully understood. Two videos on how to register for online filing and how to file DCA accounts are being produced and will be actively promoted. Following an evaluation, decisions will be made on what further videos should be made. Complete.

Outstanding recommendation 2015-2016

The email heading for a rejected form AA01 (change of accounting reference date (ARD)) is uninformative and Companies House intends that it should be changed to bring it in line with the headings for rejected accounts which convey information about the content of the email.

The recommendation was accepted and Companies House intended to make the recommended change as part of other larger change programmes which have been delayed and from which the proposed change has been removed. We were advised in July 2019 that, if progress were further delayed, the matter would be looked into further with a view to it being done as a standalone piece of work.

Disappointingly, this did not happen and the Adjudicators received a further appeal in 2018-2019 where the appellants had not spotted the rejection email.

The change has now been made. Complete.