“Sharp rise in penalties for late accounts” (Financial Mail, 9 December)

This article suggested that Companies House is prosecuting companies as a “revenue gathering exercise”.  Not so.  Let me explain what we are doing and why.

Companies House is a key source of information on companies in the UK.  We offer a large amount of information free on our website and we sell individual company documents, such as accounts, at £1 a time.  This service is very popular with businesses looking to check out potential suppliers and customers, and indeed with members of the public deciding whether they want to do business with the company down the road.  On average someone buys a document from us every four seconds.

For that to work, however, we need the accounts to be filed.  Companies have ten months after the end of the financial year to deliver their accounts to me, and the vast majority file on time.  Parliament has decided to levy late filing penalties and my responsibility under the law is to collect those penalties when accounts are delivered late.  It is true that we expect companies to prove that they sent their accounts – we can’t make them available to our customers if we don’t get them, which is why we don’t accept “lost in the post” as an excuse without some kind of evidence.

However, it is untrue that we are criminalising a vast swathe of British companies.  Late filing penalties are civil penalties, with no criminal record attached.  We only prosecute those who wilfully fail to file after repeated warnings.  The actual number of directors that we prosecute each year is around 3,800 (7,507 was the total number of offences that we prosecuted in 2005/06 and we often pursue directors who have committed more than one offence) – pretty low in the context of a live register of more than 2.5 million companies.

Finally, we have no interest in the revenue from late filing penalties.  None of this money goes to Companies House (and any costs we get from a successful prosecution are just that – costs).  We actually spend a lot of money reminding people of when their accounts are due.  We also provide an electronic filing system for accounts which offers guaranteed delivery, and I would strongly urge all companies to use it.