Economic Crime and Corporate Transparency updates

By Melissa Hardwick, Senior Manager at Carpenter Box.

Changes are coming in from Companies House under the Economic Crime and Corporate Transparency (ECCT) Act. Here we provide a summary of the upcoming changes as well as a reminder of some that have already been introduced.

Some of these changes will have a practical impact on all directors and company owners, while others may lead to changes in what your accounts will look like when published at Companies House.

What’s happened already?

Addresses

Last year, Companies House introduced new rules for registered office addresses. All companies must, at all times, have an ‘appropriate address’ as their registered office. An address is ‘appropriate’ if:

• a document addressed to the company, and delivered there by hand or by post, would be expected to come to the attention of a person acting on behalf of the company;

• the delivery of documents there is capable of being recorded as delivered.

There is also now a requirement for all companies to give a registered email address to Companies House.

You must keep your registered office address and your registered email address up to date to make sure you receive important information from Companies House. Companies House may take action against the company and its officers if you do not meet these requirements.

Statement to confirm the company is lawful

Going forward, all companies need to confirm that the intended future activities of the company will be lawful. This is now a feature on a company’s confirmation statement, and requires agreement each year, otherwise you will not be able to file your confirmation statement.

Financial Penalties

New enforcement powers have been provided to Companies House through the ECCT Act, and with these more financial penalties for non-compliance of legal obligations can be expected. Where there has previously been what could be called a ‘light touch’ around some areas like the filing of a company’s confirmation statement, from now on omissions or late filings can lead to warnings and penalty notices.

Fees

As well as empowering Companies House and endeavouring to provide sanctions to encourage timely and accurate filing, these financial penalties also provide additional funding to support investment in infrastructure changes and IT improvements which is needed to implement what the ECCT Act is aiming to achieve.

In addition, there has already been an increase in Companies House fees that has been applied across various forms and services.

What’s coming up?

Get ready for identity verification

Anyone setting up, running, owning or controlling a company in the UK will soon need to verify their identity to prove they are who they claim to be.

This will not only apply to Directors and Persons of Significant Control (PSCs) when new companies are incorporated, but also everyone appointed as such in existing companies.

It is important to make sure that all your personal details held at Companies House are correct and up to date before this process becomes mandatory. While this verification process can be undertaken voluntarily from April 2025 at Companies House, we expect it to become mandatory from Autumn 2025.

Improving transparency of company ownership

There is secondary legislation forthcoming by which companies will need to tell Companies House the full names of all shareholders and provide a one-off full shareholder list when they file their confirmation statement.

There will likely be some limited exemptions, but in the main once in force this can be expected to be published on the public record of the company.

It is worth noting that individuals have also been given the ability to suppress historical information that currently sits on public record. For companies that have previously included residential addresses, for example, they can request that such documents be suppressed from public inspection.

Changes to accounts

This next change is potentially not due until the start of 2026. Companies House are planning on streamlining the accounts filing options for small and micro-entity companies. 

Small and micro-entity companies are expected to have to file their profit and loss account as part of their financial statements. The details of what they will need to include will be set out in secondary legislation yet to be drafted. This is being developed in consultation with business and accountancy groups.

Small companies that do not qualify as micro entities will also need to file a directors’ report.

The omission of the profit and loss account in recent years from filed financial statements has been deemed to have the potential to appeal to fraudsters wishing to present a false image of a company. Improving transparency and having better quality information will make it easier to spot fraud when it happens and will also help to support business growth.

While the change is not expected to be burdensome, some company owners may be concerned about the proposed increase in publicly available information. We are closely monitoring consultations and announcements to keep our clients informed.

Companies House scams

With all this going on, it is unfortunately a time when various scams are being discovered by those impersonating Companies House. These fraudulent messages often look official and can catch even the most cautious business owners off guard. With sensitive information publicly available after incorporation, it is important to stay alert and know how to protect yourself.

How can we help?

For further advice, contact a member of our Carpenter Box Company Secretarial team on 01903 234094 or visit www.carpenterbox.com