The first set of measures under the Economic Crime and Corporate Transparency Act 2023 is now in operation. These initial changes mark the beginning of a significant transformation in UK company law, aimed at enhancing the quality and reliability of data and tackling the misuse of the companies register.
Overview of the Act
The Economic Crime and Corporate Transparency Act (the Act) brings forth a comprehensive and complex series of changes to UK company law. Over the next few years, these changes will be phased in through more than 50 pieces of secondary legislation. The implementation will also involve new operational processes, system updates, additional staff, and substantial investment in training.
New Measures Effective from 4 March 2024
- Registrar’s Powers: Companies House now has enhanced authority to query and challenge information that appears incorrect or inconsistent. This includes the power to remove inaccurate information from the register and impose stronger checks on company names that could mislead the public. Companies House can now reject applications for certain names and determine a new name, such as using the company’s registered number.
- Registered Office Addresses: All companies must now use an ‘appropriate address’ for their registered office. This means an address where documents are likely to come to the attention of a company representative, and delivery can be recorded. PO Boxes are no longer acceptable, though an agent’s address may still be used.
- Confirmation Statement: When incorporating a company, subscribers must now confirm the company’s lawful purpose. Additionally, annual confirmation statements must verify that the company’s future activities are lawful and provide a contact email address for communication with Companies House. Updated forms for confirmation statements are required for filings due on or after 5 March 2024.
- Enforcement and Sanctions: Companies House now has the power to enforce unanswered formal requests for information more stringently. Consequences can escalate from initial letters to financial penalties, annotations on the company’s record, or even prosecution, depending on the issue’s severity.
Fee Increases Effective from 1 May 2024
To support the new and enhanced powers, Companies House has increased it’s fees. These fees are set on a cost-recovery basis. Notable changes include:
- Incorporation fees are gone from £50 to £71, and digital filings increased from £10 to £50.
- Annual confirmation statements filed by post have increased from £40 to £62, and digital filings from £13 to £34.
Upcoming Changes
- ID Verification: By early 2025, Companies House plans to introduce compulsory identity verification for anyone setting up, running, or owning a UK company. This measure will help ensure the register contains genuine and reliable information. The implementation process is expected to begin in late 2024/2025.
- Accounts Reform: By early 2026, changes to accounts and filing requirements will be implemented. Companies House will transition to software-only filing. Small companies will need to file their profit and loss account and directors’ report, and micro-entities will also be required to file their profit and loss account.
Stay Informed
For more information, please visit the government’s Changes to UK Company Law hub, which highlights the changes introduced by the Act.
We are committed to keeping you informed and supporting you through these changes. If you have any questions or need further clarification, please do not hesitate to contact us info@parkerrussell.co.uk
