RoadMap
Cleaning up at Companies house
Roadmaps are our way of showing how important changes that affect the world of finance will be rolled out. Here we look at changes to Companies House. The government says £100bn is laundered in the UK every year, and sloppy record-keeping is helping criminals wash the proceeds of crime.
Cleaning up at Companies house
Roadmaps are our way of showing how important changes that affect the world of finance will be rolled out. Here we look at changes to Companies House. The government says £100bn is laundered in the UK every year, and sloppy record-keeping is helping criminals wash the proceeds of crime.
Register of Overseas Entities launched in response to the invasion of Ukraine
The Register of Overseas Entities was introduced in 2022 in response to the Russian invasion of Ukraine. It was part of Companies House reforms, which came into force on in August of that year as part of the Economic Crime (Transparency and Enforcement) Act 2022. The register aimed to create a new global standard for transparency, particularly around aspects of ownership. Entities who do not declare their ‘beneficial owner’ will face restrictions over selling their property, and those who break the rules could face up to five years in prison. Information from the register can be accessed via the Companies House advanced search feature, which gives access to the overview, filing history and people, including officers and beneficial owners (where available).
Economic Crime and Corporate Transparency Bill receives Royal Assent
The Economic Crime and Corporate Transparency (ECCT) Bill, which received Royal Assent on 26 October 2023, will introduce a range of reforms to Companies House, some of which will not be introduced straight away. Many of these changes need system development and secondary legislation before they’re introduced. However, others will come sooner.
Improving the accuracy of information held on Companies House
One of the reforms the ECCT Bill brings is the requirement for companies to record the full names of all company members who are individuals, or the names of corporate members and firms. Companies claiming an exemption from providing person with significant control (PSC) information will be required to state why they satisfy the conditions for an exemption in their confirmation statement. Accountants will need to assist clients in understanding and adhering to these new requirements to ensure accurate and up-to-date reporting. From Companies House’s perspective, this move is designed to ensure greater transparency and visibility over companies’ ownership, thereby curtailing money laundering opportunities and ensuring that there is minimal tax leakage. Alongside these changes, Companies House will also gain the power to query and remove information it suspects is false, fraudulent or inaccurate.
Mandatory verification of identity
The ECCT Bill will also introduce mandatory verification of identity for all directors, PSCs, and those filing information. This change will make it much harder to register fictitious directors or beneficial owners, stopping the vast majority of fraudulent appointments from reaching the Companies House register, and will improve the accuracy of Companies House data, to support business decisions and law enforcement investigations. It will require accountants to ensure compliance during the registration and filing processes.
Notice
This is an updated version of the article in the printed version of AT.
