Companies House (CH) is the UK's official registry of companies, incorporating new businesses and maintaining public records on existing ones. Most business owners have limited interactions with CH. Last week (Monday 4 March 2024 to be precise) saw the biggest change to CH in years. It’s not just about increased fees! This blog post summarises the key changes and what they mean for you as company directors.
How and Why We Got Here
For the record, the changes are part of the Economic Crime and Corporate Transparency Act 2023 (ECCT Act) which got royal ascent on 26 October 2023. It builds on Economic Crime Act 2022 and aims to support the economy by:
Stronger powers to tackle money laundering and other illicit activity
Provide more, and better quality, information
Reforming CH so it is “fit for the future”
Summary of Companies House Changes Coming Today
Increased CH powers
Registered email address
Statement to confirm the company's intended future activities are lawful
Appropriate registered address
Summary of Future Companies House Changes
Changes to accounts filing
Suppression of personal information
Increased fees from 01 May 2024
Identity verification procedures
What the Key Companies House Changes Mean for You
The key Companies House changes are expanded upon with links further reading below.
Increased CH powers to query and challenge information that appears to be incorrect. In the first instance, CH will use annotations on the register to let users know about potential issues with the information. CH will contact directors to give them the chance to make corrections. In more extreme circumstances, expect to see inaccurate, incomplete, false or fraudulent removed. Overall, the data quality on CH will improve over time.
Registered email address required. You’ll need to supply an email address to CH on your next confirmation statement or on incorporation so that they can contact you. This email address won’t be made available to the public.
Statement to confirm the company's intended future activities are lawful. This is an additional confirmation on the annual confirmation to say that the intended future activities of the company will be lawful.
Appropriate registered address (link). This means that any documents delivered should be come to the attention of a person acting on behalf of a company. So PO boxes are out but virtual office addresses with mail scanning facilities should be OK.
Changes to accounts filing – the big one!
The option to file abridged accounts (meaning less detailed balance sheet and profit and loss [P&L]) is going.
The option to filet accounts (meaning not submitting a director’s report or profit and loss account) is going.
Going forwards, you will have to file a profit and loss with associated notes but at this stage we don’t know if the P&L will be publicly available to view on CH. Legitimate concerns were raised around publicly available P&Ls during the consultation. At the very least, expect to see your accounts preparation fees increase because of the extra required detail. Watch this space!
Accounts filing by software only. The option to file via post or via the web-based option is disappearing. Accounts will have to be filed via software. This will improve data quality but push more people towards using an accountant. There is free accounting software out there but our practice will be sticking with Xero!
Suppression of personal information. This is a great change but will only be coming in over the next two years. One of the main concerns about CH was that it would show your home address if you used it as your registered office address. The changes mean that you’ll be able to supress this and other personal information.
Increased fees from 01 May 2024 (full list here) Most will be familiar with the annual £13 confirmation statement filing fee. This is going up to £36. It’s a big percentage increase but CH say that they have looked at their peers and the UK fees are among the lowest before the change.
Identity verification procedures are coming in for setting up and running a company. You’ll be able to verify your identity directly with CH or via an authorised agent. The exact processes are not in place and will come into effect over the coming months. Over time, all existing directors and PSCs (people with significant control) will need to have their identity verified.
The Alongside Accounting Opinion
The changes are sensible for combating economic crime and improving data quality. The increased fees are a pain but shouldn’t materially actively operating limited companies and it will pay for a better service. With the increased compliance burden and relatively lower self-employed taxes, we shall be advising certain clients to choose the sole-trader option over operating as a limited company.
However, at this point in time we know that filing a profit and loss is required but we don’t know if it will be also published on CH. We are concerned about the possible requirement to disclose a profit and loss statement on CH because it would be prejudicial to commercial operations.
Appendix: Key Links
Press release: https://www.gov.uk/government/news/companies-house-begins-phased-roll-out-of-new-powers-to-tackle-fraud
Summary page: https://changestoukcompanylaw.campaign.gov.uk/
Changes at a glance and YouTube video: https://changestoukcompanylaw.campaign.gov.uk/changes-at-a-glance/
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