TechnologyAccounting SoftwareLegal ‘flaw’ hits Companies House

Legal 'flaw' hits Companies House

Concerns arise over the legality of filing client information online

Accountants have been deterred from filing client information through
Companies House online IT system, due to concerns that it encourages accountants
to make potentially ‘false submissions’.

The system allows accountants to file client’s information online using an
authorisation code supplied by a company secretary or director. But the system
only offers submitters the choice of indicating whether they are the director or
secretary of the company when they make the filing.

This has led accountants to question the legality of filing as an agent
online, and has even stopped some from making web-based submissions.

Peter Brown, an accountant at York-based firm Peter Brown & Co, was told
by Companies House that he should file as a ‘director’ and, if it was ever
queried, he would be accepted as just an agent. Brown also claimed that
Companies House told him ‘technical web difficulties’ had stopped it from adding
an ‘agent’ button onto the online filing system.

‘It’s about signing something that’s not true,’ said Brown. ‘The person I
spoke to didn’t understand the implication of it, but it’s opening a can of
worms. By being given the code, you’ve been given clearance to submit.’

Felicity Banks, head of business law at the ICAEW, said that, although
members were ‘generally satisfied’ by filing online with Companies House, she
was concerned that advisers signing off accounts as a director was a
‘misrepresentation’.

‘We will be liaising with the appropriate people at Companies House to see if
a further option for agents can be added as soon as possible,’ she said.

An ACCA spokeswoman warned that, if accountants were dissuaded from filing
online, it would impede take-up of the facility, especially with Companies House
heavily promoting its online filing system. ‘It’s in their interests to
encourage this adoption.’

She added that accountants’ clients would lose out if filing was undertaken
in hard copy format, as this would cost double the £15 price of filing returns
online.

Companies House e-service delivery communications director Arthur West said
he had heard of accountants’ concerns on ‘several occasions’. He said the
website did not make it clear if the agent or company had filed the information
online was ‘a flaw’.

West explained there was a ‘subtle difference’ between the system asking who
had authorised the submission, and who actually filed it: ‘The person filing
doesn’t have to be the person who has authorised it. Despite this, the secretary
or director must authorise it, but does so by passing the authorisation code to
the agent.’

West was concerned that the system had dissuaded some accountants from using
it, as online filing was ‘more secure, quicker and easier’ than filing hard
copy.

‘There have been ID fraud issues through paper filing. To move ahead we must
move from filing that way.’

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