The regulations confer a power on the Registrar of Companies to impose a financial penalty on a person if satisfied, beyond reasonable doubt, that the person has engaged in conduct amounting to a relevant offence under section 1132A of the Companies Act 2006. The Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024 should be read in association with this.
Depending on the offence, this can be a: (1) fixed penalty – a set amount based on the offence, previous behaviour and other factors (2) daily rate penalty – a daily penalty for each day that the offence continues (3) combination of a fixed penalty and daily rate penalty.
WARNING NOTICE
If the registrar suspects that a person has engaged in conduct amounting to a relevant offence, the registrar may issue a warning notice in writing to that person.
The warning notice must contain: (1) the grounds for suspecting that an offence has been committed (2) the period within which the person may make written representations to the registrar about their conduct - at least 28 days beginning the day after the warning notice date (3) how to deliver a representation (4) a warning that at the end of the given period, the registrar may impose a financial penalty.
WHAT TO DO IF YOU GET A WARNING NOTICE
Take the required action
You will not receive a financial penalty if you take the required action, within 28 days beginning the day after the date on your penalty warning notice.
For example, you’ve received a warning notice for not filing your confirmation statement. If you file your confirmation statement within 28 days of your penalty notice date, you will not receive a penalty. Â
You may also contact us to explain any information you want us to consider. This is called a ‘representation’.
REPRESENTATION
You can make a representation within 28 days of the date on your penalty warning notice, by emailing: [email protected]
You can also write, but this will take us longer to process, at:
Companies House, Crown Way, Cardiff CF14 3UZ
They’ll consider your representation to determine whether you’ve committed an offence and if a penalty is appropriate.
They’ll let you know they’ve received your representation and contact you with the outcome.
They will not make a decision about the offence and penalty until they’ve considered all the information you provide.
PENALTY NOTICE
After the end of the period stated in the warning notice, the registrar, if satisfied beyond reasonable doubt that the person has engaged in conduct amounting to a relevant offence, may issue a penalty notice to the person who was issued the warning notice.
The penalty notice must be in writing and must set out: (1) the grounds for issuing the financial penalty (2) the type of penalty (fixed, daily rate, or both) (3) how the financial penalty is calculated (4) for a fixed penalty, the amount of the penalty (5) for a daily rate penalty, the amount of the daily rate, the day the amount started to accumulate and the day on which, or the circumstances in which, it stopped (6) how to pay the penalty (7) the period in which the payment is is to be made (not sooner than the end of 28 days beginning on the date the penalty notice is given (8) rights of appeal (9) the consequences of not paying.
HOW PENALTIES ARE CALCULATED
Penalties are calculated based on seriousness of the offence and whether it is the first, second or third offence of the same type.
Because financial penalties are an alternative to prosecution, the penalties are similar to those that a court might impose as fines. The penalties consider costs and surcharges, with fine levels indicating the seriousness of the offence.
Financial penalties will increase for repeat offenders. However, the registrar may consider prosecution instead of a financial penalty where the case warrants it.
Using the standard scale of fines for summary offences, level 1 - £200, level 2 - £500, level 3 - £1000, level 4 - £2500, level 5 - unlimited. Level 3 offences are considered minor, level 5 offences are considered serious, imprisonable offences are considered very serious.
To set the financial penalty amount, Companies House will consider (1) the seriousness of the offence (minor, serious or very serious) (2) how many times you or your company has committed the same or similar offences in the last 5 years. They will also assess (1) how much you or your company deserve the blame (culpability) (2) the harm involved (3) any factors that make the offence more or less serious (aggravating and mitigating factors) (4) any representations you make after receiving a warning notice (5) whether you've complied with requirements before the end of the warning notice period.
FINANCIAL PENALTY AMOUNTS
First offence | Second offence | Third offence | Fourth or more offence | |
Minor offence | £250 | £500 | £750 | £1,000 |
Serious offence | £500 | £750 | £1,000 | £1,500 |
Very serious offence | £750 | £1,000 | £1,500 | £2,000 |
PAYING A PENALTY
Pay your penalty by bank transfer using the information on your penalty notice.
You must pay the penalty in full, before the due date on your penalty notice.
APPEALING A PENALTY
If you receive a penalty notice you may, with the permission of the court, appeal to the County Court or, in Scotland, the Sheriff Court.
You must have the permission of the court to bring an appeal.
You may only appeal on the grounds that the decision to issue a financial penalty, the level or type of financial penalty or any condition stated in the penalty notice: (1) is unlawful, (2) is irrational or unreasonable, (3) has been made on the basis of a procedural impropriety or otherwise contravenes the rules of natural justice.
You must apply to the court for permission to appeal within 28 days beginning on the day after the date the penalty notice is given (unless the court is satisfied that there was good reason for the failure to seek permission before the end of that period).
If you seek permission to appeal, you must serve written notice of the application on the registrar. You must do this within 7 days beginning with the date on which the application for permission was issued. This must include a statement setting out the grounds on which the appeal is made.
You should send the notice by email to [email protected]
You can also write to us at:
Companies House, Crown Way, Cardiff CF14 3UZ
The court determining an appeal may: (1) dismiss the appeal, (2) vary the amount of the financial penalty, (3) change the nature of the financial penalty between a fixed penalty, a daily rate penalty or a combination of both, (4) quash the financial penalty in whole or in part
UNPAID PENALTIES
If you do not pay your penalty within 28 days of the penalty notice date, the registrar may try to recover the debt through: (1) a debt recovery agency, (2) the court.
NON COMPLIANCE
If you still do not comply with the requirement explained in the warning notice, Companies House may issue further penalties as well as the original penalty.
For example, if you receive a penalty for failing to file your confirmation statement, you may receive a new penalty for each day the confirmation statement remains unfiled.
We’ll consider the ongoing nature of the offence when setting the penalty amount.
If you or your company commits the same serious or very serious offence 3 times in 5 years, Companies House may consider prosecution.