Corporate report

Annual report by the independent adjudicators to Companies House, 2022 to 2023

Updated 16 August 2023

Introduction

Companies House currently has 4 independent adjudicators: Dame Elizabeth Neville, Mrs Jessica Pacey, Ms Deirdre Domingo and Mr Brian Stanton. Ms Domingo and Mr Stanton joined us in June 2022.

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 annual accounts after the filing deadline. If an appellant wishes to pursue an appeal which has passed through the 2 internal stages of the appeals process, it is passed to one of us. If an appeal is rejected 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. If a complainant is dissatisfied with the outcome of the 3 internal stages for consideration of a complaint, they may ask for the matter to be referred to an independent adjudicator.

We also deal with complaints closely related to appeals, which have been referred directly to us without passing through the complaints process. A complainant who remains dissatisfied with the findings of the independent adjudicator may approach a Member of Parliament and ask for the matter to be referred to the Parliamentary and Health Service Ombudsman.

As well as adjudicating cases referred to us, we make recommendations and suggestions on service and process issues to improve organisational efficiency and fair treatment of customers.

This year, we have made 15 recommendations, which are set out in Appendix A. All have been dealt with.

Two recommendations from 2020 to 2021 are still outstanding. These are discussed later in Appendix B in this report.

We are not part of Companies House and are completely impartial. A brief outline of our professional profiles may be found on GOV.UK.

Our cases, whether appeals against late filing penalties or complaints, are allocated by rotation to ensure a lack of partiality. 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.

Appeals process

Companies House has an online appeals portal designed to speed up logging and response times and simplify the appeals process. By March 2023, 42% of appeals were made electronically using the portal.

During the course of the year, Companies House has introduced a more streamlined and focused way of dealing with appeals, which should speed up the process as well as improve the quality.

Backlog of appeals

The backlog of appeals was a serious problem in 2021 to 2022. Companies House made huge efforts to clear this, introducing innovations and streamlining processes to enable appeals to be dealt with more quickly as well as injecting more staff.

The progress has been commendable. For 2022 to 2023 all appeals have been logged as they have been received, which ensures that a hold is immediately placed on penalty collection procedures.

On 31 March 2023, there was a backlog of 10,030 appeals compared with 44,665 on 1 June 2022. On average, appeals in the backlog were being dealt with 87 days after receipt.

New appeals coming in do not enter the queue but are dealt with in normal timescales.

Cessation of paper reminders

Companies House stopped sending reminders to file accounts by post on 2 November 2020 and companies were advised to sign up for reminders by email.

73% of companies have now signed up to receive email reminders. However, we routinely see cases where the company has not signed up to receive email reminders and the deadline is missed because the director or directors are unaware of when it is. They do not realise that the accounts need to be filed until the first compliance letter is received after the filing deadline, by which time a penalty is inevitable.

Early email reminders

With a view to improving compliance, Companies House intends to introduce a new early email reminder during the course of this year. The reminders will be sent 6 months before the confirmation statement filing deadline and 9 months before the accounts filing deadline, in addition to the usual filing reminders.

Appeals

Number of appeals

One of the consequences of the backlog is that the adjudicators are still dealing with appeals, which have waited 6 to 10 months to receive a first reply. Many of our cases still relate to the late filing of companies’ 2021 accounts.

The number of penalties imposed in 2022 to 2023 has dropped back from the exceptionally high number of 380,153 penalties imposed in 2021 to 2022.

Table 1: Appeal rate and successful appeal rate

Year	Penalties raised	Appeals received	% appeal rate	Appeals allowed	% appeals allowed
2020-2021	178,264	47,166	26.5%	15,687	33.3%
2021-2022	380,153	83,347	21.9%	11,218	13.4%
2022-2023	322,680	64,289	19.9%	42,789	66.6%

The variability in the figures in Table 1 is caused by the COVID-19 pandemic, the backlog in appeals which led to very long delays, and a large number of appeals allowed for directly COVID-19-related reasons. The 2022 to 2023 figures for appeals allowed include many appeals made from 2021 to 2022.

The independent adjudicators considered 128 appeals in the period 1 April 2022 to 31 March 2023, an increase on the 87 received in the previous year, but nowhere near the numbers we received prior to the pandemic.

We think it’s too soon to see any reduction resulting from the new more focused and streamlined processes for dealing with appeals, which were introduced in the course of the year. We may still be experiencing the result of the slowing down of the appeals process because of the backlog.

Table 2: Number of appeals considered by independent adjudicators

	2012-13	2013-14	2014-15	2015-16	2016-17	2017-18	2018-19	2019-20	2020-21	2021-22	2022-23
Total	466	391	305	306	329	267	337	329	115	87	128

We upheld 8 of the 128 (6.25%) appeals referred to us and made 15 recommendations, all of which have been actioned.

Types of companies

The nature of the companies appealing against penalties imposed because their accounts had been filed late was in line with the distribution of previous years.

The types of company, which made up more than 10% of our appeals, are:

• dormant/not trading: 54 (42%)
• double penalty imposed 34 (27%)
• first accounts 17 (13%) (some were also dormant/not trading)
• property management companies: 15 (12%)

First accounts and dormant companies

17,198 appeals (26.7% of all appeals) were received from companies registered as dormant from 2022 to 2023.

Dormant companies are always disproportionately represented in the cases referred to us with very high figures for non-compliance year on year. It is common for new companies to file dormant accounts in their first year, so there is an overlap between the two categories.

12,665 (19.7% of all appeals) were received from companies which were due to file their first set of accounts between 1 April 2022 and 31 March 2023, filed late and then appealed to Companies House.

We have been consistently drawing this disproportionate non-compliance to the attention of Companies House for many years and asking them to work on improving compliance by dormant companies and companies filing their first accounts.

The Companies House external communications team ran a month-long directors’ responsibility campaign to support the September accounts peak filing period and raise awareness of directors’ responsibilities. This was targeted at all companies, not specifically at dormant companies and first-time filers.

Ideas advanced by us in our annual report for 2021 to 2022 were that the new director’s letter could present the requirement for all companies, including those not trading, to file accounts in a more impactful way. The letter still does not specify that companies must file accounts even if not trading.

Another suggestion was to place a red warning flag on email reminders to companies filing their first accounts or which had filed dormant accounts in the previous year. Neither suggestion was taken up.

We made 2 recommendations last year, the first of which we had thought was quite straightforward. We recommend that Companies House consider whether the new director’s letter should be amended to state explicitly that all companies must file accounts, whether trading or not, and to consider placing a red warning flag on email reminders to companies filing their first accounts or which filed dormant accounts in the previous year.

Other communications have been put in place for new directors to understand their filing obligations, such as YouTube videos and blog posts. We are told that the new director’s letter will be changed in due course and our recommendation will be incorporated with the other changes, but there is no scheduled date.

We have been told that the second part of the recommendation about email reminders is accepted but again there is no attached timescale and it should be incorporated when other changes are made.

Our second outstanding recommendation from 2021 to 2022 was a repeated recommendation.

We again recommend that Companies House take dynamic action to improve compliance by dormant and newly incorporated companies. We raise these non-compliance issues at our quarterly meetings with Companies House.

It is disappointing that in spite of a number of campaigns to raise directors’ and prospective directors’ awareness of their responsibilities and emphasis in advice that dormant companies must file annual accounts, there has been no change year on year. These are companies which can ill afford the penalties and are particularly likely to view the penalties as unfair and harsh.

Grounds for appeal

There has been a reduction in the number of appeals to us based on the ill health of a director (10 or 5%) or the ill health of a member of a director’s family, bereavement or other exceptional circumstances preventing the timely filing of the accounts (13 or 7%).

We did uphold 4 of the 13 cases where exceptional circumstances applied, only one of which related to ill health.

Reasons for late filing, which were given for over 10% of the cases referred to us, are listed below.

Financial hardship or penalty is unfair or excessive

A substantial number of appeals (39 or 30%) included as grounds for appeal that the company or appellant is experiencing financial hardship or that the amount of the penalty is excessive. This is not an acceptable ground for appeal as the registrar has no discretion not to collect a penalty on the basis of ability to pay.

Companies House contributed to the delay in filing

We considered 33 (26%) of cases in this category and upheld 4 of them.

In a number of cases, appellants had assumed that an appeal had been allowed because of the long delay before Companies House replied to their initial appeal. We did not uphold any of these cases.

Non-receipt of a reminder to file the accounts

In 27 cases (21%), non-receipt of a reminder to file accounts was grounds for appeal.

On 4 November 2020, Companies House ceased posting reminders to file accounts to companies’ registered addresses. When this ceased, companies were encouraged to sign up to the email reminders service.

73% of companies have signed up to the email reminders service but we are still seeing cases where directors were reliant on the paper reminder, had not realised it has ceased, had not signed up to email reminders and so missed the filing deadline and incurred a penalty.

None of these appeals were upheld because the registrar is not legally obliged to send reminders. It is incumbent on directors to know when the deadline is and to ensure that accounts are filed on time.

Electronic filing of accounts

88% of companies are now filing their accounts electronically.

In 31 (17%) of the cases we considered, the user had a problem with WebFiling. If the user is filing on or close to the deadline, this may lead to late submission of the accounts when the problem might have been resolved if filing had not been left until the last minute.

Some users fail to complete the submission process. This means that they do not receive a submission reference number or an email confirming receipt.

It is surprising that in these cases, the presenter is not prompted to check what has gone wrong. In our daily lives, when we make electronic transactions or purchases, we invariably receive a confirmation on screen and by email, and Companies House is no different. We did not uphold any of these cases.

The company is dormant

Fifteen (12%) companies argued that the penalty should not be collected because the company is dormant. None were upheld because all companies, including companies which are not trading, must file accounts at Companies House every year.

Confusion or mistake by director (or directors) or person submitting the accounts

This was identified as a reason for the late filing in 18 cases (10%).

Due to the COVID-19 pandemic, companies whose filing deadlines fell between 27 June 2020 and 5 April 2021 were awarded an automatic 3-month extension to their filing deadlines.

In some cases, directors and accountants were unaware that the period for the automatic extension had ended and filed accounts late in the following year. In the case of accountants, this sometimes applied to up to 20 sets of accounts.

Appeals to the registrar

The fourth and final stage of the appeals process is an appeal to the registrar.

34 of the 120 appeals rejected by the independent adjudicators were the subject of a further appeal to the registrar. The registrar did not uphold any appeals.

In most cases, appeals to the registrar do not contain any new information and the registrar only occasionally reaches a different conclusion from the independent adjudicator.

Table 3: 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
2020-21	44	38
2021-22	32	37
2022-23	34	27

Upheld appeals

We upheld or partially upheld 8 (6%) of the appeals referred to us.

Exceptional circumstances

We upheld 4 cases where exceptional circumstances applied.

Cases 1 and 2

We dealt with 2 cases where the directors were caught between the competing requirements of section 441 (directors’ duty to file accounts) and section 1112 of the Companies Act 2006 which relates to knowingly or recklessly filing documents, including accounts, at Companies House, which are misleading, false or deceptive in a material particular.

In the first case, the company could not file accurate accounts pending the outcome of an HMRC investigation. We had dealt with a similar case in the previous year where we had also upheld the appeal.

In the second case, there was a dispute among the 4 directors about whether the company was solvent or not, and 2 of them would not approve the accounts. In both cases, we found that the situation was exceptional.

Companies House staff considering the appeals had taken the position that the accounts must be filed no matter what and had rejected the appeals. Companies House does not offer any guidance on what to do in this situation.

Filing accounts, which are materially incorrect, is much more serious than filing late, so it is not surprising that directors opt for the latter. We recommended that Companies House considers whether it should offer guidance on how to proceed where companies find themselves caught between the requirements of the 2 pieces of legislation.

Companies House has agreed with us that such situations are exceptional and provided guidance to its staff, including updating the training manual, which, in our view, suffices.

Case 3

In the third case, a company posted its accounts to the former address of the London Office of Companies House to which it had been sending the accounts for a number of years. They did not know it had changed.

Normally, when Companies House address is changed, a forwarding arrangement is put in place for a year. The easement put in place by Companies House during the COVID-19 pandemic allowing companies a further 3 months to file the accounts meant that there was an interval of 15 months since the previous accounts were filed. The mail forwarding arrangements had ceased by the time the company attempted to file its accounts more than a year after the address had changed.

Case 4

The fourth case related to a director who had undergone a long period of hospitalisation for mental illness and was incapacitated for an extended period.

Companies House takes the view that a decision can be made not to collect a penalty in exceptional circumstances. For example, a catastrophe or the onset of a serious illness immediately before a filing deadline, making it impossible to file the accounts on time or apply for an extension to the filing deadline.

While this is generally the case, we have reminded Companies House in the past that it is not a prescriptive requirement that the cause of the late filing should have occurred shortly before a filing deadline, and that a situation where a director is unexpectedly incapacitated over a long period of time is not precluded.

We recommended that Companies House ensures that staff dealing with appeals are aware that exceptional circumstances may arise where the reason for the late filing of accounts has not occurred immediately before a filing deadline. This has been disseminated to the team dealing with late filing penalties.

Companies House contributed to the delay in filing or provided incorrect advice

Cases 1 and 2

In 2 cases, the company was liable to a penalty but the adjudicator recommended that a lesser penalty be collected because Companies House had contributed to the further delay in filing the accounts. This was because Companies House had failed to notify the companies that their accounts were overdue in a timely manner.

Companies House usually notifies companies that their accounts are overdue in time for them to be submitted before they are more than a month late and the penalty rises to the next penalty band. That did not happen in the first case and the director may have been unaware that the accounts were outstanding.

The adjudicator recommended that the amount payable was £150, which is the amount of a penalty in the first penalty band.

In the second case, there was a considerable delay before the second overdue accounts notice (DEF49) was sent by Companies House, depriving the director of the opportunity to file the accounts before they were over 3 months late and liable to a penalty of £750.

The adjudicator recommended that the company should pay a penalty in the second penalty band of £375.

Cases 3 and 4

In both cases, incorrect advice was given by a member of staff in the contact centre about penalties.

Recordings of telephone conversations can often be retrieved and the adjudicators are able to listen to them. Generally, the quality of the advice is very good and the call centre staff are knowledgeable or consult appropriately.

It is not uncommon for staff dealing with appeals not to ask for the relevant information to trace a call recording at an early stage of the appeal. In case 3, no effort was made to obtain a recording of the call in the first 2 stages of the appeal and the replies sent to the appellant were poor.

On the day of the filing deadline, the director was having trouble logging onto WebFiling but if he had posted a paper copy of the accounts they would not have arrived until the filing deadline had passed. A member of the contact centre staff incorrectly told the director that no penalty would be imposed if the accounts were sent by post.

The adjudicator found that the penalty should not be collected. She recommended that the 2 members of staff who dealt with the first and second stages of the appeal be given advice about retrieving call recordings and to address their considerations to the grounds for appeal.

It was also recommended that the member of call handling staff be given advice or further training on the clarity of his communications with callers. Feedback was provided to the staff concerned.

The director in case 4 was told by a member of contact centre staff that the late filing penalty would not increase from £150 to £375 until the accounts were more than 3 months overdue, whereas the penalty increases to £375 once the accounts are more than a month late.

The director did not proceed as expeditiously as he could have done to file the accounts. The adjudicator found that the lesser penalty should be collected.

Other observations and recommendations

On occasion, we identify matters which we feel need drawing to the attention of Companies House, even though we have not upheld an appeal.

For many years, Companies House responses to appeals explained the limitations of the registrar’s discretion not to collect a penalty with the sentence:

The registrar cannot decide not to collect a penalty simply because it may seem fair and equitable to do so.

This is a counter-intuitive remark, which is drawn from the case of the Queen upon the application of (1) POW Trust and (2) Al’s Bar and Restaurant v (1) The Chief Executive and Registrar of Companies and (2) The Secretary of State for Trade and Industry (December 2002) in which the Honourable Mr Justice Lightman stated:

There can be no intention that the registrar is to have a general dispensing power excusing from recovery of penalties whenever he considers it just to do so.

The adjudicators have remarked to Companies House repeatedly over many years that this standard phrase, which is often used in replies to appeals, is counterintuitive without being placed in context and without further explanation. In one appeal, the appellant articulated clearly his objection to the use of the sentence in determining that a penalty must be paid.

We recommended that Companies House ceases to use versions of the sentence ‘the registrar cannot decide not to collect a penalty simply because it may seem fair and equitable to do so’ and finds a form of words to express the principle that a lay reader can understand. Companies House has abandoned the use of any version of this sentence.

In another case, an appellant expressly asked for his appeal to be referred to the independent adjudicator. He was twice asked to confirm that he wished the appeal to be so referred. When Companies House did not receive a reply, debt collection agents were instructed.

In other cases, appellants asked for their appeal to be escalated to the second stage but received a further reply at the first stage. In previous discussions with the adjudicators, Companies House had agreed that when appellants have made their wishes clear, there is no need to seek further confirmation as this is a redundant exercise.

We recommended that staff be reminded not to ask for unnecessary confirmation of appellants’ requests for escalation of their appeals. A new process called ‘once and done’ was introduced on 10 October 2022 to streamline the appeals process and remove redundancy of all kinds. We have observed that the process is now much improved.

The standard Companies House response to appeals, which assert that accounts were submitted electronically by the deadline, is that the only proof of submission is receipt of the confirmation email. However, when accounts are submitted electronically, the user reaches a confirmation of submission screen which does confirm that the submission has been successful, includes the submission reference number and advises its retention. This is important, for instance in a case where the presenter has entered an incorrect email address and does not receive the confirmation of receipt email.

We recommended that Companies House reconciles its standard approach on proof of submission with what is said on its WebFiling screen. This has been done.

Complaints

Three complaints were referred to us at the third stage of the complaints process. One was fully upheld, one element of the second complaint was upheld and the third was not upheld.

Complaint 1

The adjudicator upheld this complaint in its entirety.

A member of a property management company and former director reported to Companies House that the company’s 2021 confirmation statement was incorrect in that it included details of a director who was deceased. She complained about how her report of the incorrect confirmation statement was handled by Companies House.

Her complaint consisted of 3 elements:

1. The unacceptable timescale of responses to her communications with Companies House.
2. The disproportionate time and effort required on her part for any progress to be made. She complained about the length of time taken to reply to her question about who was responsible for the prosecution of a person filing an incorrect confirmation statement.
3. Companies House had failed to follow its own complaints procedure. It had been obstructive and had tried to prevent the escalation of her complaint to the independent adjudicator.

Things went wrong in this case from the beginning because of the lack of clarity on what is a complaint against Companies House and is the remit of customer services, and the statement on GOV.UK that a complaint may be made about ‘the accuracy of information on the companies register’. Companies House itself seemed to find it difficult to draw a distinction between complaints against Companies House and other instances where the word ‘complaint’ might be used to make a report to Companies House, with a view to action being taken, as in this case.

Such complaints or reports are the remit of the relevant department. The adjudicator recommended that what is understood to be a complaint against Companies House is clearly defined both internally and on GOV.UK.

Companies House said that the wording on GOV.UK could not be changed as it was in line with government standards and that the internal issue has been addressed in the guidance.

The adjudicator found that there were inordinate delays in this case. Some responses to the complainant from Companies House took a long time or no reply was sent at all. The complainant pointed out that if an email was sent to the dedicated email address for escalated complaints, no automated acknowledgement was sent.

The adjudicator upheld complaint 1. She recommended that if a substantive reply is not sent in 5 working days to emails sent to [email protected], then an acknowledgement should be sent. This has been actioned.

The second element of the complaint flowed from the first and the adjudicator upheld the complaint.

Regarding the third element, Companies House staff did not have a clear understanding of the complaint, which led to confusion about what was being dealt with at what stage. This was not helped by the emails from the complainant, which Companies House either did not receive or did not deal with.

Companies House wrongly told the complainant that her complaint could not be escalated to the independent adjudicator. A letter to the complainant’s Member of Parliament was riddled with wrong information, which showed Companies House in a better light.

The adjudicator upheld the complaint that Companies House had failed to follow its own complaints procedure and that it had initially refused to refer the complaint to an independent adjudicator.

The adjudicator was not provided with all the communications in this complaint but learned of them through the complainant’s chronology. The incorrect responses and obfuscation on how the process was conducted were both disappointing and surprising.

In our experience, Companies House generally provides accurate information and is quick to acknowledge when it has got things wrong. The extent to which things went wrong in this case is unusual.

I ask that this report be drawn to the attention of the registrar and relevant senior managers. This has been done.

Soon after this complaint, Companies House introduced a revised complaints procedure introducing increased accountability, tracking and timescales for responses at all stages of the complaint, record keeping for all communications and improved monitoring and supervision. The adjudicator said it is paramount that complainants should be kept informed of the progress of their complaint and when they can expect a reply.

We recommend that staff compliance with this element of the new policy should be actively monitored. This forms part of the new complaints procedures.

Complaint 2

The second complaint also related to 2 property management companies.

One of the directors was dissatisfied with the actions of the companies’ agents. He complained about the level of service received from Companies House: specifically the failure to provide him with the identity of the individuals who had used one company’s authentication code, the description of one of his requests under the Freedom of Information (FOI) Act as vexatious, the refusal to redact his signature on a document filed in paper form from the Companies House record and the length of time taken to deal with his complaint.

Companies House does not have the information to provide the identity of individuals using a company’s authentication code. Legally, it cannot redact a signature on a paper submission, which has been entered on the company record. These complaints were not upheld.

One of the Companies House responses failed entirely to respond to the content of the communication from the complainant. The adjudicator recommended that the author be given advice. The individual no longer works for Companies House.

The adjudicator found that the complainant’s FOI request should not have been classified as vexatious and should have received a response. The adjudicator upheld this complaint.

Companies House did not accept my finding. It disagreed that the FOI request was not vexatious. It also considered that as this was an FOI matter, it was outside the adjudicators’ remit. This is correct as we can only investigate complaints about level of service, mistakes and complaint handling. The next step for a person who is dissatisfied with the response to an FOI request is to write to the Information Commissioner’s Office to appeal or complain.

Companies House acknowledged that the complaint could have been handled more expeditiously. The adjudicator made no further comment.

A second element of the complaint related to the policy and procedures of Companies House, specifically security and other weaknesses in the Companies House filing systems and the authentication code in particular.

The adjudicator recommended that the IT department be invited to consider the points made by the complainant on the Companies House systems, and not just the authentication code process. We are advised that this has been done.

Complaint 3

This complaint was about the failure of Companies House to notify the complainant of the procedure for registering an objection to the removal from the register of a company of which he was a creditor. The company was dissolved and the complainant was not able to take proceedings to recover the debt.

Companies House recognised it was at fault and apologised, offering to reimburse the cost of reinstatement of the company by way of a court order, which is the only way it can be done. The complainant wanted Companies House either to pay the cost of reinstating the company prior to its reinstatement or perhaps not reinstating it at all and compensate him with the amount of the debt owed to him by the dissolved company.

The adjudicator did not consider that either would be appropriate and did not uphold the complaint.

Complaints made within appeals

We consider complaints made within appeals if they are closely related to the appeal, although not part of the grounds for appeal. Frequently, complaints are made about how an appeal has been handled. We identify the complaints and findings within our reports.

A number of appeals included a complaint about the long delays before receiving a response caused by the backlog in the Companies House system. In some cases, when there was a delay in logging a complaint, appellants were the subject of an action to collect the penalties. In most cases, Companies House apologised and we did not comment further.

A further 7 complaints were made from 2021 to 2022 in the course of an appeal against a late filing penalty. 2 complaints were upheld and 3 partly upheld.

Complaint 1

A complaint was made by an appellant that he had been the subject of discrimination because he was a Welsh speaker.

He believed that no reply was sent to his initial appeal because it was waiting for translation. However, he had received a reply in Welsh 6 days after his initial appeal.

The complaint was not upheld.

Complaint 2

The Companies House replies to the appeal failed to address one of the main points of the appeal.

The adjudicators have previously made recommendations about staff dealing with appeals accurately identifying the actual grounds for appeal and addressing each one. The adjudicator upheld this complaint.

Companies House has recently updated its system for dealing with appeals to include this as a formal part of a response to an appeal.

Complaint 3

A reply to an appellant contained an irrelevant paragraph about County Court action, which caused confusion and alarm. The appellant raised this in their reply but the subsequent response did not address the incorrect reference to the County Court.

The adjudicator upheld this element of the complaint and recommended that the content of standard letters should in every case be reviewed by the writer to ensure that irrelevant statements, paragraphs or information are deleted before being sent. Feedback was given to the case managers and concerned and a reminder was sent to the whole team.

The appellant also complained that Companies House had failed to show compassion for his personal circumstances. This part of the complaint was not upheld.

Complaint 4

This complaint had a number of elements, one of which was about the customer service received from Companies House. The appellant did not consider that she was dealt with fairly or reasonably, within a reasonable timeframe, or with all of her queries being properly explained.

The adjudicator found that the appellant had received good service and that the team was responsive, polite, helpful and constructive. However, the adjudicator found that there were 2 areas where the service was not as good as it might have been.

It would have been helpful to explain to the appellant why a date credit had been applied to the date of filing of the accounts and why a duplicate set of accounts had been returned to her. In addition, the appellant was wrongly told that LLPs can file their accounts electronically.

These elements of the complaint were upheld and the adjudicator requested that feedback be provided to the relevant customer services team. Feedback was given.

A complaint was also made that there had been a delay of 7 days before a letter from Companies House was emailed to her, arriving on the date on which collection action had been put on hold and leaving her with no time to consider how to proceed. This element of the complaint was upheld.

It was recommended that any deadlines in the correspondence are double-checked prior to sending to a company or LLP to ensure that customers have sufficient time to address the issues raised in that correspondence. The issue was caused by a delay in the contact centre issuing the reply back to the appellant, which arose because of a change in provider.

These issues have now been resolved and the contact centre is up to date with forwarding emails.

Complaint 5

A complaint was made that debt collection action had been taken by Companies House. However, the appellant had not replied by the date to which a hold on collection action had been placed. Not upheld.

Complaint 6

This complaint related to the Companies House standard of service, its difficult systems, and ‘outrageous’ threats of fines and criminal charges. Not upheld.

Complaint 7

The complaint concerned the failure of a contact centre advisor to provide their full name, escalate the call upon request, and look up company details on request. It was not possible to obtain evidence in response, either by means of an audio recording of the call or from the advisor and the complaint had to be considered on the information provided by the complainant alone.

The complaint was upheld. Companies House agreed to contact the customer directly.

Conclusion

The independent adjudicators continue to find Companies House efficient, responsive, thoughtful and helpful.

In the course of the year, there was a change in the staff dealing with appeals being referred to us, but the changeover was seamless. Senior staff are committed to improving the handling of appeals.

Dame Elizabeth Neville DBE QPM DL

14 June 2023

Appendix A

Summary of recommendations 2022 to 2023

The adjudicators recommended that Companies House considers whether it should offer guidance on how to proceed where companies find themselves caught between the requirements of the 2 pieces of legislation. Companies House has agreed with us that such situations are exceptional and provided guidance to its staff, including updating the training manual, which in our view suffices. Discharged.

The adjudicators recommended that Companies House ensures that staff dealing with appeals are aware that exceptional circumstances may arise where the reason for the late filing of accounts has not occurred immediately before a filing deadline. This has been disseminated to the team dealing with late filing penalties. Discharged.

The adjudicator recommended that the 2 members of staff who dealt with the first and second stages of the appeal be given advice about retrieving call recordings and address their considerations to the grounds for appeal. It was also recommended that the member of call handling staff be given advice or further training on the clarity of his communications with callers. Feedback was provided to the staff concerned. Discharged.

The adjudicators recommended that Companies House ceases to use versions of the sentence ‘the registrar cannot decide not to collect a penalty simply because it may seem fair and equitable to do so’ and finds a form of words to express the principle which a lay reader can understand. Companies House has abandoned the use of any version of this sentence. Discharged.

The adjudicators recommended that staff be reminded not to ask for unnecessary confirmation of appellants’ requests for escalation of their appeals. A new process called ‘once and done’ was introduced on 10 October 2022 to streamline the appeals process and remove redundancy of all kinds. We have observed that the process is now much improved. Discharged.

The adjudicators recommended that Companies House reconciles its standard approach on proof of submission with what is said on its WebFiling screen. This has been done. Discharged.

The adjudicators recommended that what is understood to be a complaint against Companies House is clearly defined both internally and on GOV.UK. Companies House said that the wording on GOV.UK could not be changed as it was in line with government standards and that the internal issue has been addressed in the guidance. Discharged.

The adjudicators recommended that if a substantive reply is not sent in 5 working days to emails sent to [email protected], then an acknowledgement should be. This has been actioned. Discharged.

The adjudicator asked that the report of complaint 1 be drawn to the attention of the registrar and relevant senior managers. This has been done. Discharged.

It is paramount that complainants should be kept informed of the progress of their complaint and when they can expect a reply. We recommend that staff compliance with this element of the new policy should be actively monitored. This forms part of the new complaints procedures. Discharged.

One of the Companies House responses to a complaint failed entirely to respond to the content of the communication from the complainant. The adjudicator recommended that the author be given advice. The individual no longer works for Companies House. Discharged.

The adjudicator recommended that the IT department be invited to consider the points made by the complainant on the Companies House systems, and not just the authentication code process. We are advised that this has been done. Discharged.

The adjudicator recommended that the content of standard letters should in every case be reviewed by the writer to ensure that irrelevant statements, paragraphs or information are deleted before being sent. Feedback was given to the case managers and concerned and a reminder was sent to the whole team. Discharged.

The adjudicator requested that feedback be provided to the relevant customer services team on the content of their replies. Feedback was given. Discharged.

It was recommended that any deadlines in the correspondence are double-checked prior to sending to a company or LLP to ensure that customers have sufficient time to address the issues raised in that correspondence. The issue was caused by a delay in the contact centre issuing the reply back to the appellant caused by a change in provider. These issues have now been resolved and the contact centre is up to date with forwarding emails. Discharged.

Appendix B

Summary of outstanding recommendations 2021 to 2022

We recommend that Companies House consider whether the new director’s letter should be amended to state explicitly that all companies must file accounts, whether trading or not, and to consider placing a red warning flag on email reminders to companies filing their first accounts or which filed dormant accounts in the previous year.

Other communications have been put in place for new directors to understand their filing obligations, such as YouTube videos and blog posts. We are told that the new director’s letter will be changed in due course and our recommendation will be incorporated with the other changes, but there is no scheduled date.

We have been told that the second part of the recommendation about email reminders is accepted but again there is no attached timescale and it should be incorporated when other changes are made. Outstanding.

The adjudicators again recommend that Companies House take dynamic action to improve compliance by dormant and newly incorporated companies.

It is disappointing that in spite of a number of campaigns to raise directors’ and prospective directors’ awareness of their responsibilities and emphasis in advice that dormant companies must file annual accounts, there has been no change year on year. Outstanding.