COVID-19: Delaying filing deadlines - is it really such a good idea?

A three month extension for filing accounts to Companies House may be welcome support, but this isn't necessarily the time to put accounts to one side.

Dated: 30 March 2020 Author: Lisa Richards, Partner 

The three-month extension for filing accounts to Companies House is likely to be welcomed by many businesses and over the weekend, the government announced that 10,000 businesses had already applied for an extension.

As COVID-19 begins to impact on all aspects of a business, this extension aims to ease the burden so firms can prioritise on dealing with the many other pressures they are currently facing.

However, whilst this is welcome support this may not be the time to simply put accounts to one side, particularly if your business is considering applying for loans, grants or any other additional funding streams.

In fact, this is the time when management information is most needed to help with application processes where lenders require timely and accurate information.

A joint statement from the FCA, FRC and PRA this week said that it was "important to recognise that, while the reduction in activity associated with Covid-19 could be sharp and large, it is likely to rebound sharply when social distancing measures are lifted”.

Dains can work with businesses to ensure their accounts are as accurate as they need to be and to address these challenges.

Dains Partner Lisa Richards said: “Whilst the three-month extension is welcome as many businesses are having difficulty accessing their records at the moment and facing other more pressing challenges, it’s not the time to stand still.

“During the months ahead, many businesses are all likely to be applying for grants, loans and other additional finance at the same time to keep themselves going. It is equally important to consider that many suppliers rely on credit ratings, generated by the insurance market and late filing is a trigger for downgrading in normal circumstances.

“Having accurate and timely accounts will certainly give businesses the edge when it comes to approaching lenders and so they get the application right at the first time of asking.

“At Dains, that’s where we can help. We understand that our clients and businesses are facing a very challenging time but we also recognise the importance of making sure that businesses have their finances in order for the additional funding they are likely to need.

“Our team of experts are all working remotely and are looking at creative ways to ensure that statutory accounts continue to be prepared to meet their requirements.

"Businesses don’t want to find themselves in a situation where they don’t have the right financial information at their fingertips when they need it and end up at the back of the queue for additional funding at a time when they most need it.”

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