Planned reform of Companies House
Since September 2020, Companies House have been looking into ways to clamp down on fraud and money laundering to give the public greater confidence in transactions held on the register.
Historically, Companies House have never had the ability to query documents which have been filed. The Registrar has always had to accept information filed in good faith and place them on the register.
Since the plans to reform Companies House have begun in September 2020, several consultations have taken place. The main topics for these consultations were:
- Introducing a new power to query information
- Reform of the registrar’s existing powers
- Rules governing company registers
The government’s final response to these consultations came when it issued the White Paper on Corporate Transparency and Register Reform at the end of February 2022.
Summary of some of the significant changes
The changes announced involve some significant changes to filing requirements which should result in greater digital checks and therefore improve the quality of information filed:
- Small companies will no longer have the option to prepare and file abridged and filleted accounts. This will mean that they will be required to file both the directors’ report and profit and loss account. The changes to the requirements to file a profit and loss account have been included to assist creditors and consumers with making more informed decisions on a company based on their previous financial results.
- Micro-entities will continue to have the option to choose whether to file a directors’ report but will be required to file their profit and loss account.
- Dormant companies will be required to file an eligibility statement.
- All company accounts will be encouraged to be filed digitally with full tagging where possible. Currently there is an option to file these by paper if you are unable to tag the accounts using software etc. The move to fully digital filing is hoped to increase efficiency and accuracy of the information filed.
- Anyone who is setting up, running, owning or controlling a company in the UK will need to verify their identity with Companies House.
- Company directors will be better able to protect personal information published by Companies House which could put them at risk of fraud.
- The Registrar will have powers to query suspicious appointments or filings. In certain cases, they will be able to request further evidence or reject the filing. They are also responsible for informing security agencies of suspicious activity.
Several bodies have expressed their concern in small and micro companies having to file their profit and loss account on the public register but currently this requirement is still planned to come into effect with the changes being made.
There were plans in place to shorten the filing deadlines for company accounts however these plans have currently been scrapped on the basis that it may reduce the quality of information being filed.
The Bill is set to be put to parliament for debate and Royal Assent is expected to occur by next spring. However, some elements may not come into force immediately.
Your usual Wheelers contact will keep you informed as any further announcements are made regarding the changes being implemented and how this will affect you and your company.
Article written by Ann-Marie Naylor