Companies House

4. Mr V complains about the appeals process for appealing a late filing penalty with CH. Mr V says the current CH process is difficult to access and understand and does not contain clear explanations about use of its discretionary powers. It also does not include information about how to contact the Independent Adjudicator (IA).

5. Mr V also complains the IA report contained come inaccuracies he did not have the opportunity to correct or challenge.

6. Mr V also complains CH does not use complaints to learn and improve its service.

7. Mr V says the appeals process caused additional work and took extra time to prepare for and complete. He also says the process was very frustrating to go through.

8. Mr V would like CH to make system improvements to its appeals process, making the process clearer and providing consistent guidance.

9. Mr V is a company director for an active company (the Company) listed as a charity that is involved in making improvements at a local school. At the time of the complaint there were six company directors.

10. CH is a government body that stores information on all the limited companies and limited liability partnerships registered in the UK. CH incorporates and dissolves limited companies. It also registers company information and makes it available to the public. CH is an executive agency, sponsored by the Department for Business, Energy & Industrial Strategy.

11. Every company must send information to CH. This includes annual accounts and confirmation statements and any changes to company details. Late filing penalties were introduced in 1992 to encourage directors to file their accounts and reports on time, because this information has to be on public record.

12. Company directors filed the Company’s 2019 accounts after the filing deadline and CH imposed a late filing penalty. The deadline for filing accounts was 30 November 2020 and CH received them on 18 March 2021. The penalty imposed on a company for late filing of accounts depends on the length of the delay. The standard penalty of £750 applies if a company files its accounts between three and six months late. As the accounts were four months late, the penalty imposed was £750.

13. On 14 April 2021 Mr V sent an email of appeal and explained he was a new director. He said the other directors had suffered significant problems due to the COVID-19 pandemic and this had caused the delay in filing the accounts. Mr V explained it was a small company and needed every penny to complete its current project, which would benefit young children.

14. On 8 September 2021 CH rejected the appeal. The response explained the legal responsibility for filing the accounts on time rests equally with all the directors of the Company (the Company had four directors at the time of the filing deadline). CH explained the limited nature of the registrar’s discretion not to collect a penalty and that it can only be applied in exceptional circumstances, such as when an unforeseen catastrophe affects a company immediately before a filing deadline.

15. Mr V argued the global pandemic had been both catastrophic and unexpected and had a devastating impact on the Company’s directors, adding it would not be right for him to go into the personal circumstances of the individual directors.

16. On 1 October 2021, after further considering the complaint, a CH senior caseworker confirmed the Company must pay the penalty. They explained every director was responsible for the delivery of the accounts and CH had already extended the filing deadline by three months to help the Company due to the COVID-19 pandemic. The response advised that if Mr V wished to continue with his appeal, the next stage was to write to the IA at the usual CH address.

17. Mr V then exchanged several emails with CH stating he could not easily find how he could complain to the IA. Mr V complained to CH the details on its website were not clear. He also complained a letter he received about how to appeal to the IA was inaccurate.

18. As he was not satisfied with how CH addressed his appeal and complaints, he appealed to the IA. In addition to his previous points, Mr V included some additional information to further explain his reasons for appealing the penalty. He explained he believed the director responsible for submitting the accounts had missed the deadline for submitting the accounts as they had been suffering from mental health problems after having a child and were not able to file the accounts on time.

19. The IA shared its report on Mr V’s appeal on 17 November 2021. The IA upheld the late filing penalty. It found that although the director responsible for filing the accounts had personal problems, it is the responsibility of all directors equally to make sure accounts are filed on time. Although Mr V’s appeal also mentioned the effects of the COVID-19 pandemic, the IA found this did not amount to ‘a catastrophe occurring immediately before the filing deadline’.

20. The IA did partly uphold Mr V complaints about administration errors by CH during the appeals process. However, as these were individual administration errors that did not impact the outcome of the appeal the IA did not recommend any action by CH in relation to these points.

21. On 3 December 2021 Mr V sent a further appeal to the registrar at CH explaining he believed the IA had misrepresented some of the comments in his appeal. On 21 December 2021 CH replied to this further appeal. The CH chief executive and registrar said they had fully considered his concerns but the IA had fully considered his appeal and agreed with their findings. The registrar concluded discretion to collect a penalty can only be exercised in exceptional circumstances that impact the company immediately before the filing deadline.

22. As Mr V was not satisfied with the result of the IA report and particularly that no action would be taken, he contacted us on 1 April 2022 to escalate his complaint. However, the complaint that he has brought to us is about the CH’s complaint handling process only, not the substantive matters about the late filing penalty raised in those complaints and his appeal to the IA.

Mr V says the CH complaints process is difficult to access and understand and does not contain clear explanations about use of its discretionary powers. It also does not include information about how to contact the IA.

26. Mr V told us: ‘I was told by CH I could appeal to an IA. I then tried to find how to contact the IA but failed to do so. So, I emailed CH and was finally told by CH (in an email exchange of 12 messages) that I had to write to CH to do this. It was not only me who could not find how to contact the IAs. Our MP’s office could not find how to contact the IAs either. I was not mistaken in my belief that information about the appeal process is difficult to find. My belief was supported by our MP’s office too. The information about how to appeal to an IA cannot be “readily found”, as stated by the IA. It is unacceptable that a process that ought to be well sign posted is so difficult to access. As I told CH on 23 October all that is required is a simple sentence on the website explaining exactly how to contact the IA.’

27. Mr V also told us: ‘The IA’s report states [...] “There are many other situations in which in a penalty may not be collected” [...] but I do not know when these many other situations are. Indeed, it appears that the only consideration when the Registrar exercises discretion is a catastrophe immediately before a filing deadline. If that is the case information on the CH website must surely say so. I note in the 2018/19 IA’s Annual Report that there is a recommendation [....] “We recommend that CH develops a clearer way to explain the limited discretion of the Registrar not to collect a penalty.” I agree, but in my view the circumstances when the Registrar can exercise discretion are still not made clear. Far clearer guidance about the circumstances when the Registrar can exercise discretion needs to be published on the CH website.’

28. The IA addressed his complaint the appeals procedure could not easily be found on the CH website. The IA report said: ‘Mr V is mistaken on this point as the information may readily be found. The appeal process is described, and the part played by the Independent Adjudicators. When the Senior Casework Unit (SCU) has dealt with a case, the appellant is told that the next stage is to write to the Independent Adjudicators and to do this via the SCU. There is no secrecy. Mr V was provided with this information. We do not provide our personal email addresses for privacy reasons. Appeals to the Independent Adjudicators are routed via the SCU, which collates the information and correspondence for the appeal and allocates it to an adjudicator on a cab rank basis. We do not have a collective Independent Adjudicator address and appellants do not select the adjudicator who will consider their appeal.’

Our view

29. Mr V believes the appeals process is not clear or easy to understand. In particular, he says it is not clear what you need to do when you want to escalate your complaint to the IA. We have examined the information the CH website provided at the time of Mr V’s appeal, which he lodged on 14 April 2021.

30. We can see the page at that time contained information about any aspect of CH that the public may need to seek information about. There are many links on the page to different sections and information, depending on what each person is looking for. One of the links on the page is a link to see all guidance and regulations. This link takes you to a second page with a list of guidance CH provides. One of the headings on this page is ‘Late filing penalties’.

31. If you click on this, a large amount of guidance appears. This includes the late filing penalties guidance and the late filing penalties appeal manual. There is also a link that sends you directly to the government’s online service to appeal a late filing penalty.

32. The late filing penalties information explains: ‘Late filing penalties were introduced in 1992 to encourage directors to file their accounts and reports on time, because this information is required for the public record. All companies must send their accounts and reports to CH every year.’

33. The information in this section goes on to explain what penalties apply for late filing of accounts. The information sets out that the penalty varies depending on how late the accounts are. There is also further information on the consequences of not filing and how to avoid a penalty.

34. There is also information on this page headed ‘Appealing a Penalty’. The information says: ‘You can appeal against a penalty, but it will only be successful if you can show that the circumstances are exceptional. The registrar has very limited discretion not to collect a penalty. It may be applied when an unforeseen event happens at a critical time - for example, a fire destroying records a few days before the filing deadline.’

35. The final two sections on this page contain information on how to send an appeal and what to do if your appeal is rejected. In relation to rejected appeals the information says: ‘If your appeal is rejected you can contact the Senior Casework Unit, Late Filing Penalties Department at the appropriate CH office in Cardiff, Edinburgh or Belfast. If the senior casework unit upholds the penalty, you can ask for the independent adjudicators to review your case. Do not contact the adjudicators until you have heard from the senior casework unit.’

36. From the information on the government website, we can see all the information a person would need to ask about and appeal against a late filing penalty is available and easily accessible.

37. Mr V told us there was no information about the level of discretion the registrar has when considering an appeal. Following the same process as above, we can see the information explains that ‘the registrar has very limited discretion’. The information on rejected appeals also says: ‘Parliament decided that discretion resides solely with the registrar. The registrar’s discretion is limited, and the adjudicators cannot force them to reverse their decision to collect a penalty.’

38. Further information on the registrar’s discretion is contained in the late filing penalties appeals manual, which is one of the links available on the late filing penalties guidance page.

39. Section 10 of the appeals manual relates to registrar’s discretion. This section states: ‘The registrar has no discretion not to levy a penalty when a company delivers its accounts late. All companies that deliver accounts late will automatically incur a late filing penalty. The case of “The Queen on the application of (1) POW Trust Limited and (2) Al’s Bar and Restaurant Limited v Chief Executive and Registrar of Companies and the Secretary of State for Trade and Industry (2002) EWHC 72783 (Admin)” confirmed this interpretation. However, Section 453(3) of the Companies Act 2006 states that “the penalty may be recovered by the registrar” which implies the registrar has discretion whether to collect the penalty. The registrar can only apply discretion in exceptional circumstances, for example, where an error by CH has contributed to the late filing or where an unforeseen catastrophe strikes the company immediately before the filing deadline. Discretion rests with the registrar, whose decision marks the end of the appeals process.’

40. The late filing penalties appeals manual also contains guidance on how to deal with the most common appeals. This guidance says: ‘When considering an appeal against a penalty, a case manager should be fair, independent and objective. Personal views must not influence decision making. Case managers must not be affected by improper or undue pressure from any source. We should only apply discretion if the appeal falls into a situation where it would be appropriate for the registrar to use discretion.’

41. The guidance goes on to set out the most common scenarios for an appeal and how each of these should be considered. Although all appeals will be different, the majority of the most common reasons appear in this section and there is guidance on when discretion will and will not apply.

42. The listed scenario closest to the circumstances Mr V explains in his appeal relates to an accountant who is ill or has died. The guidance on this scenario states discretion should not be applied. It does go on to say: ‘In exceptional circumstances, you may consider applying discretion if an accountant who is a sole practitioner became seriously ill immediately before the filing deadline.’

43. However, in Mr V’s case there were multiple directors who are all equally responsible for filing the accounts on time, so the discretion relating to the sole director would not apply.

44. All the information above is available to any person making enquiries on the CH website, so from the information we have been able to readily gather all the information described above was available at the time Mr V was making his appeal.

45. This appears to be in line with our ‘Principles of Good Administration’, which say: ‘Public bodies should provide services that are easily accessible to their customers. Policies and procedures should be clear and there must be accurate, complete and understandable information about the service.’

46. Mr V emailed CH on 14 October 2021 asking how to escalate his appeal to the IA. Mr V complains the information on the CH website does not contain information on how to do this.

47. In reply to Mr V’s request for information on how to contact the IA, CH told him: ‘Appeals addressed to the Adjudicators are sent to them via CH. It is for convenience and to protect their privacy that the Adjudicators’ addresses are not made public. Furthermore, it is CH staff who prepare and allocate cases between them on a strict rotation basis.’

48. When we asked CH for further information it explained to us the reason it does not publish the details of how to raise your complaint to the IA on its public website. It told us any person who complains must first go through the CH complaints process, and there is information on its website how to make a complaint. It is only when the complaint process has been completed that the individual can then raise their complaint to the IA if they are not happy with how CH dealt with the complaint.

49. By not making the IA direct contact details available to a complainant, CH hopes to prevent complainants approaching the IA until it is appropriate to do so. When CH finalises a complaint, it includes details of how to raise the complaint to the IA. Since Mr V made his complaint, CH has also taken steps to make this explanation clearer for future complainants.

50. CH has also told us it has made a change in the way a complainant would appeal to the IA, and all appeals to the IA are now sent to an allocated adjudication address. CH believes this change has streamlined the experience for its customers. Although CH has made a slight change to the process to make it clearer for future complainants, this does not mean the procedure that was already in place was wrong.

51. Again, there is nothing to suggest a failing on the part of CH as defined in our ‘Principles of Good Administration’. CH does not have to provide the public with direct contact details for the IA, and it has been open and transparent about the process in place and the reasons for handling escalations to IA in this way.

52. Mr V complains more generally that the CH complaints process is not fit for purpose and discourages people from complaining. We have found the information needed to make an appeal or complaint about CH is readily available to anyone with access to the internet. The CH website also explains other ways you can make a complaint if you cannot do it online, so there are no signs the complaints process is not accessible to anyone who needs to use the service.

53. Therefore, we have not found anything to suggest the CH appeals process is unfit for purpose and there are no signs of a failing. Therefore, we will take no further action.

Mr V complains the IA report contained come inaccuracies he did not have the opportunity to correct or challenge.

54. Mr V told us when CH escalated his complaint to the IA he was not able to communicate directly with the IA. The IA mentioned in its report that it had considered what CH had sent to it. Mr V believes he should have the right to state his case directly instead of the IA relying on material CH sent to it.

55. Mr V also told us he was concerned as the email he received from the IA says ‘I must emphasise that I cannot enter into subsequent correspondence with you about the content of the report or any other matter related to it’. Mr V told us this has not given him the opportunity to challenge the report, which he believes contains some inaccuracies.

56. After the IA’s decision, which it published on 17 November 2021, Mr V sent a further appeal request to the registrar at CH. In his appeal Mr V said he believes the IA seriously misrepresented comments made in his appeal, and so it did not fully consider the impact of ill health and the global pandemic which led to the late filing of the Company’s accounts. In response to this appeal the registrar replied to Mr V again on 21 December 2021.

57. The registrar told him: ‘Whilst I empathise with the impact that these circumstances have had on the company, as my colleagues have informed you, my discretion not to collect a penalty is limited to instances when exceptional circumstances occur that impact the company immediately before the filing deadline, leaving no time to prevent the delay, or where the actions of Companies House have directly contributed to the filing delay. Neither scenario applies in this case.’

58. The registrar also says: ‘You have appealed against the penalty on the grounds that you believe the full circumstances and impacts of ill health on one of the former directors has not been properly considered. You have also referenced the charitable purposes of the company and requested the £750 penalty be refunded. The grounds of your appeal have been fully considered by the Independent Adjudicator. Whilst I note that you have raised some concerns about the Adjudicator’s report, I agree with her findings.’

Our view

59. We understand Mr V feels uneasy CH sent his appeal direct to the IA, and he therefore cannot be sure what information the IA considered when completing its report. However, from the detailed information set out in the IA’s report it appears the IA addressed all his concerns, even if Mr V does not always agree with the decisions the IA made. Each of his reasons for appealing have been set out and addressed. From all the information available, we cannot see any issue Mr V has raised that the IA had not considered. We can see Mr V does not agree with the IA’s decision, but there is no evidence to suggest it did not consider all the information Mr V had previously supplied to support his complaint.

60. Our ‘Principles of Good Complaint Handling’ say a public body should: ‘Investigate complaints thoroughly and fairly, basing their decisions on the available facts and evidence, and avoiding undue delay. Public bodies should deal with complaints objectively, fairly and consistently’.

61. We can see the IA has used the evidence available to it to come to a decision on the facts it has. We understand Mr V remains frustrated he did not get the opportunity to add to his initial complaint. We note there is nothing to suggest the IA felt it needed any further information to make a decision, given that he had already set out the grounds for his complaint, and the point of asking for escalation to the IA was the appropriate time for him to submit information relevant to his concerns.

62. Mr V remains unhappy there was no way to appeal to the IA about what he considered to be mistakes in the report. The IA’s report ends with the IA telling Mr V: ‘This report marks the conclusion of my participation in this case. I must emphasise that I cannot enter into subsequent correspondence with an appellant about the content of the Report or any other matter related to it.’

63. The report also says: ‘If Mr V wishes to take his complaint further, his next step is to refer it to the Parliamentary and Health Service Ombudsman.’

64. We can also see, as previously mentioned, that following this Mr V appealed to the registrar and in that appeal he raised his concerns the IA had not fully considered his complaint or had misrepresented some comments contained in it. The registrar addressed this further complaint and did not find any cause for concern about how the IA had investigated his appeal. As Mr V was still not satisfied, he then approached us to take his complaint further. Therefore, we cannot see he has been denied the opportunity to have his concerns reviewed, which happened at two further stages.

65. We understand Mr V’s concern that he could not reply to the IA directly. We can see both the IA and CH have followed the complaints process correctly in addressing these concerns and the IA appropriately explained how to take his complaint further if he was not satisfied.

66. The CH complaints procedure, which is published on its website, explains the process in full. It says: ‘If your complaint is not resolved, you can ask us to refer your complaint to the independent adjudicators. You have to finish the internal complaints process before you can ask us to do this.’

67. It then goes on to say: ‘If you’re not happy with the adjudicator’s decision, you can ask your MP to take your complaint to the Parliamentary and Health Service Ombudsman.’

68. There is no published guidance that says the IA can or should reconsider an appeal or a complainant can contact it directly to make further representations. The IA has correctly told Mr V if he is not satisfied with its report the next step is to refer it to us.

69. The registrar has given an additional response to Mr V to tell him it considered his appeal further, even though it is not a part of the published process and it did not need to do so. From all the evidence available to us it appears the IA and CH have fully addressed Mr V’s complaint.

70. As CH and the IA dealt with Mr V’s complaint appropriately there are no signs of a failing for this part of his complaint and we will take no further action.

Mr V says CH does not use complaints to learn and improve its service.

71. Mr V told us: ‘The IA upheld three elements of my complaint but incredibly do not recommend any action by CH. Not even the complaint I made about CH providing conflicting deadline for payment of the penalty was deemed worthy of mention to CH. Payment deadlines are crucial for small organisations who may be struggling for cash. An inaccurate deadline could be the difference between survival and extinction. Surely CH employees could have been asked to check the consistency of key information when dealing with such sensitive issues? There is no harm either in reminding CH employees about the need for good customer service.’

72. Mr V also told us he did not feel CH took his complaint seriously and when he had some suggestions of how it could improve its services it ignored this. Mr V does not feel CH has learned anything from dealing with his complaint and he fears the next person in the same position will be just as frustrated as he was.

73. When addressing his complaint, the IA told Mr V it upheld three points of his complaint. These were that the wrong year was shown in the filing date for the accounts, there was a long delay before CH responded to his initial complaint and CH set conflicting deadlines for paying the late filing penalty. Although the IA did identify these errors, it did not make any recommendations for CH to take any actions as the IA noted it had already apologised to Mr V and the mistakes only had a limited impact.

74. The IA recognised the mistakes were individual mistakes rather than systemic errors so did not feel there were any actions it could recommend, especially considering CH had already apologised to Mr V.

75. In his complaint to us Mr V highlights the CH errors identified in the IA report and complains the IA’s reply to those mistakes shows CH is not willing to learn from them.

76. In response to us asking CH to provide more information it told us: ‘Companies House is committed to providing customers with a high standard of service. I can assure you that all mistakes are taken very seriously. Feedback has been provided to the caseworkers involved with a view to improving their performance. All complaints are taken seriously, are considered, and addressed.’

Our view

77. The reply we received from CH shows it has taken some action to make sure the individual mistakes made when dealing with Mr V’s complaint are not repeated in future. CH also told us since Mr V’s complaint it has made improvements to its online complaints reporting to make it easier for customers to make a complaint and better understand the process. CH confirmed this action was in response to complaints made when it first switched to an online service.

78. To confirm this action by CH, we have compared its website at the time of Mr V’s complaint and the information on its website now. CH has made changes to the information provided to complainants.

79. One change is that there is now more information about how to appeal a late filing penalty. Most significantly, there are now links to both the online appeals procedure and information about the IA. In our view, these changes show CH is trying to make its appeals procedure easier to access and understand.

80. The evidence available shows CH is still working to improve its online services. The procedure for appealing a penalty online is straightforward to understand and navigate. CH recognises the system is not perfect and says it will continue to try to improve its services to customers to make their experience when making an appeal smoother.

81. Our ‘Principles of Good Complaint Handling’ say: ‘Learning from complaints is a powerful way of helping to improve public service, enhancing the reputation of a public body and increasing trust among the people who use its service. Public bodies should have systems to record, analyse and report on the learning from complaints. Public bodies should feed that learning back into the system to improve their performance.’

82. Although Mr V does not feel CH used the opportunity to learn from its mistakes, we have seen signs from CH that it took his complaint seriously. We know he remains frustrated about this, so we hope the work we have done to check the website improvements for ourselves is helpful to him.

83. During our communication with CH it has provided us with information to show it is willing to learn from complaints and by doing this it has been able to show it has complied with our ‘Principles of Good Complaint Handling’.

84. Therefore, there are no signs of a failing in this part of the complaint, and we will take no further action.

1. We have carefully considered Mr V’s complaint about Companies House (CH). We understand Mr V was frustrated with the CH complaints process and believes CH did not take on board the issues he raised with it. Mr V is concerned the complaints process was difficult to access and understand and did not contain clear explanations about use of CH’s discretionary powers. He feels CH does not use complaints to learn and improve its service.

2. We have seen no sign anything went wrong with how CH dealt with Mr V’s complaint. This is because CH showed us how it has used complaints from Mr V and other customers to improve its service.

3. After carefully considering all the available evidence, we can see CH followed its published complaints procedures when dealing with Mr V’s complaint. It also acted in line with our ‘Principles of Good Complaint Handling’. Therefore, we will take no further action, and we explain our decision in more detail below.