Brewdog’s failure to publish its accounts on time shows that tougher penalties are needed to stop firms from flouting the rules, according to top tax lawyer Dan Neidle.
Neidle, who came to prominence for exposing former Chancellor Nadhim Zahawi’s tax affairs in 2022, has said that bigger firms are currently able to ignore accounting deadlines imposed by Companies House due to the meagre fines imposed by the body.
Brewdog, the divisive Scottish pale ale maker, was due to file its accounts for 2023 with Companies House by the end of June, but has failed to offer any explanation for the delay.
Under UK law, companies face a maximum fine of £7,500 if their accounts are filed more than six months late. However, Neidle said the low level of fines mean that firms like Brewdog “don’t take [the deadlines] seriously” and are able to easily disregard them.
“The fees for late filing are very significant for, for example, a small coffee shop, but irrelevant to the likes of Brewdog – £7,500 max – it’s nothing,” Neidle, founder of the think tank Tax Policy Associates, told City A.M.
“Properly run companies never file their accounts late. FTSE 100 companies are way more complex than Brewdog, which is a simple business. I can’t recall any filing late. Heads would roll. Shareholders would be in uproar.”
Neidle added the “law should change” and “late filing fees should be geared to the size of a company”.
Brewdog did not respond to a request for comment. A spokesperson for the department for business and trade, which has oversight of Companies House, defended the regime and insisted that the “current penalty system remains fit for purpose, with around 99 per cent of companies regularly filing their accounts within the legal deadline”.
“In conjunction with Companies House, we continually monitor the level of fees, charges and penalties applied under company legislation and take action where appropriate,” the spokesperson said.
Companies House said it was a matter for the government.
While changes to UK company law this year have granted Companies House new powers to “query information” and challenge misleading company names, fines for late filing of accounts have not budged.
Late accounts have dogged the business registration body for years. More than 25,000 companies missed deadline in 2018 and incurred a late filing penalty as a result, according to government figures.
Among the excuses given for the late filing were “I found my wife in the bath with my accountant”, “pirates stole my accounts”, “a volcano erupted” and “goats ate my accounts”, according to a 2019 video published by Companies House.
The UK’s most valuable fintech firm Revolut has been among the companies to come under fire for failing to publish its accounts on time, missing the deadline by months for its 2021 and 2022 books.