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Covid’s recent lockdown anniversary marks a period defined by disruption and a multi-faceted support programme for businesses of all sizes and complexity.
Out of the legislation introduced, a recent announcement provided a reminder that the automatic extensions provided by the Corporate Insolvency and Governance Act are soon coming to an end.
What is happening?
Brought into force on 26th June 2020, the Corporate Insolvency and Governance Act was designed to “relieve the burden” on businesses struggling with the coronavirus.
This was designed to allow businesses additional breathing room to respond to the disruption and focus their energy and resources on tackling the fallout surrounding the virus, particularly those facing significant impact, such as those in the hospitality sector.
This involved two professional elements: accounts and insolvency.
The legislation allowed businesses registered with Companies House additional time to file their accounts, with the deadline applied automatically and not requiring those affected to apply for an extension.
This change was also accompanied by a moratorium around insolvency, which introduced a novel restructuring plan that creditors would be required to stick to. However, creditors were still required to fully complete their filing responsibilities and follow formal liquidation and insolvency practice.
The 25th March 2021 saw further developments, with Companies House adjusting its guidance on filing, accompanied by an explicit reminder that the automatic renewal period was coming to an end and that failure to meet this deadline would result in issues for the business in question.
What does this mean in practical terms?
In simple terms, if your company accounts filing deadline falls after the 5th of April 2021, you will not be able to enjoy an automatic extension for your filing.
However, if your company accounts deadline falls after this cut-off point, you will still be able to apply for a three month extension, but this will require you to prove your eligibility for the extension.
This makes it important to factor this into your filing plans and aim to pursue a window that suits your current situation and the remaining time available to you.
What should you check?
The material provided by the Government outlines two key checks for businesses. These include reviewing:
Your Current Status: If Covid-19 is negatively impacting your work, it is important to apply for an extension in a timely manner. Recently-amended guidance about applications can be accessed from here. Given the tight nature of the forthcoming deadline, we would advise this guidance is reviewed.
Your Legal Exemptions: If your business has already received a deadline extension for its accounts, you may potentially not be eligible for a further extension. This is because current legislation sets a limit of a maximum filing period of 12 months.
If you are unsure about whether this may affect you, your eligibility can be checked online through the Companies House web portal which can be accessed from here.
These recent changes mean it is essential to take time to review the status of your company accounts and act appropriately. This is particularly important if you are dealing with the impact of Covid-19 including staff turnover or furlough actions but no matter your position, make sure that you are fully informed about your position and take the time to plan appropriately.
If you have any concerns related to the important statutory filing and reporting requirements for your own company, please get in touch with Senior Associate Solicitor, Emma Benniston a member of the Corporate team here at Ansons on 0121 716 3701 or email firstname.lastname@example.org
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