What’s at Stake When Accounts Are Filed Late?

With the regulatory deadline for filing annual accounts just days away, housing associations that have not yet finalised and published their accounts are risking more than just administrative inconvenience.   As the filing window closes, now is the time to ensure all reporting obligations are met.

Regulatory deadlines

Different filing requirements apply for different registrars:

• The Regulator of Social Housing (the Regulator) requires annual accounts and auditors reports to be filed within 6 months of the end of the financial year.  
• Community Benefit Societies must submit an annual return and accounts to the Financial Conduct Authority (FCA) within 7 months of the end of the financial year. 
• Limited companies must file their annual accounts at Companies House within 9 months after your company’s financial year ends, or 6 months for a PLC.  Penalties apply for late filing. 
• Charities registered with the Charity Commission must file your annual return including (except for the smallest organisations) accounts with the Charity Commission within 10 months of the end of your financial year.

Funder requirements

You will also need to think about your funding agreements. Copies of annual audited must usually be provided to funders and hedging counterparties within 6 months of financial year end.  A delay in providing this information may constitute an event of default.  

For issuers of listed debt securities, the UK Listing Rule 17 requires publication of their annual report and accounts also within 6 months of the financial year end.

Take action now if you are at risk of late filing

If you have concerns regarding your ability to meet the filing deadline, you should contact the Regulator as soon as possible, to make them aware of the issue and note where it is outside of your organisation’s control. 

Where your funding arrangements contains a six month (180 day) contractual deadline without an applicable grace period, you will need to contact funder(s) and seek to negotiate a contractual waiver with each of them, to avoid falling into a default scenario.  

Those with listed debt securities will also need to obtain a waiver from the bond trustee on behalf of the noteholders, and you must additionally notify the FCA and place a public notice (RNS) on the LSE's Regulatory Information Service.  

Additional ramifications for listed securities

Late publication will have additional ramifications for the status of the listed securities including: 

• The RNS will attract the attention of the market, including the ratings agencies, and this may have reputational consequences;
• Among the examples of when the FCA may suspend the listing of securities in UKLR is when the issuer fails to publish financial information in accordance with the UK Listing Rules.  Therefore, you may be also required to undergo a process to suspend listing until the accounts have been published.  This restricts the ability of noteholders to trade their securities.
• If interest falls due while the listing is suspended, there may be withholding tax implications. 

If this affects you, we would strongly recommend that you seek specialist advice on the tax and legal implications for your specific circumstances.

In summary …

In a sector where trust and accountability are high priority, timely publication of financial information is essential for maintaining the confidence of the Regulator, funders and tenants.  Late filing will trigger regulatory scrutiny, raise red flags for investors and stakeholders, and it may impact credit ratings. As the clock ticks down, it’s crucial to act swiftly to avoid the consequences of late filing.