According to the latest figures from Companies House, one in ten limited companies still file their annual accounts on paper instead of digitally.
However, following the recent push to digitise tax records, the percentage of companies filing their returns online hit 89.6%, compared to 84.9% the year before.
Companies House said it aims to become a "fully digital organisation" in the future, and will continue to explore how to make digital accounts mandatory in the 2022/23 financial year.
Compliance was high in 2021/22, with only 1.6% of companies filing late, regardless of whether they filed their returns by paper or online.
Despite this, a record number of penalties were issued during the year. Over 380,000 penalties were levied to companies as they recovered from the Covid-19 pandemic - a 111% increase compared to 2020-21 (201,866).
This had a knock-on effect on the total value of penalties, which rose from £96.7 million in 2020/21 to £174 million in 2021/22.
Speaking on compliance in its annual report, Companies House said:
"Over the coming years, we will work with our users to further develop services in order to make creating and maintaining a compliant company as easy as possible."
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