Company has not filed it's accounts

[AllAboutMargot]

My daughter is having a new house built. She's told me that the builder has asked for a 10% deposit and asked us to help out.

I did what I consider a routine check on the company on the Companies House site. It turns out that the company's accounts haven't been filed yet for 2022. There's an 'Accounts Overdue' notice on the record.

I'm concerned that the building company may not be in a good financial position and that any deposit would be unsafe.

My daughter has been through a very difficult relationship breakdown and is desperate to move forward with her life. I don't want to let her down, but I have a gut feeling that giving a deposit to this building company would not be wise. Or am I overthinking? And how do I tell her?

If she hasn't got the deposit how is she funding the build?

Would this be a loan to your daughter or a gift? If a loan get a contract printed and signed.
Just tell her what you've said here, that you've looked the company up and don't feel comfortable paying them the money.

In a typical year, over 250,000 companies are fined for missing the deadline for filing their accounts. It may be a red flag but, on its own, it does not necessarily mean the company has financial problems. What did the previous accounts look like?

Good question prh - I haven't gone there yet, but I'll make that my next step.
I'm shocked that so many companies are late filing their accounts!
Sk8 - she's funding the build from the proceeds of the sale of the former marital home, just not gone through yet.

I think that you are bring sensible to be cautious. Can you not tell the builders that you need to see their accounts and ask why they are not filed. Also has your daughter insisted on a proper builders contract and seen their public liability/ full liability and builders risk insurance?

In my experience as a tax professional, it could mean they don’t have the money to pay an accountant to prepare the accounts.

Also likely to mean their company tax return to HMRC is late and any tax is unpaid.

Companies House will eventually strike them off if the return isn’t filed.

Take a look at the directors, and then look at the companies they've been involved with in the past. Either this company has been going a while, in which case there should be little concern, or the directors/owners are in the habit of setting up a new company every two years or so, then closing it down without filing accounts.

It depends when the accounts were due to be filed. If they were December 2022 accounts, they would need to be filed by 30 September so they would be 23 days late now. I've noticed other large companies are showing overdue accounts when I know it not to be the case; I think like a lot of public services at the moment there are problems with paper filings at Companies House. Also, auditors cannot get the staff at the moment and I know of delays to audits as a result.

All that said, 23 days would start to unnerve me a bit.

So @Collaborate said look at who is running the business too if the main builder is not listed as a director/officer its another possible red flag and look at the registered office and any changes to it. Plus pull the planning and look at who was involved and how many other jobs they have worked on.
Plus is the site in the same business as the building company.

Whether or not they have filed accounts correctly, I'd be wary of paying builders up front. I did this, apparently to cover the costs of purchasing materials, but the builders ended up disappearing with a large chunk of my savings. The best way is to negotiate a contract (I assume there is one?) that sets out payment at various stages once key milestones are met.

That will work if the DD has the site however if it is a new estate built "on spec" the norm is to pay a booking deposit, the builder can use the contracts to finance borrow money etc if needed.

The one thing the OP's daughter needs to make sure that her loan terms run alongside the build finish dates and not risk ending up with no loan (expired / change of circumstance etc ) if there are provision to extend the build schedule.