The Economic Crime and Corporate Transparency Act 2023
For some time, the UK has been seen as something of a soft touch when it has come to both incorporating a limited company (or any other corporate body) and then filing accurate and timely information about its ownership, operations and location.
Concerns about economic crime and transparency have been voiced by various political and business groups for many years and in recent times, international concerns have become increasingly vocal.
It is something that the UK has been wrestling with for years with legitimate concerns regarding the potential abuse of the company registration system being balanced against concerns about stifling economic growth and entrepreneurship.
In October 2023, the Economic Crime and Corporate Transparency Act (ECCTA) came into effect. It is a landmark legislation, introducing changes to the filing requirements for businesses of all sizes.
The ECCTA triggers the largest set of changes at Companies House in 180 years. Its provisions affect all companies registered in the UK and are aimed at strengthening the government's fight against fraud whilst ‘helping to create a climate of growth’.
The various provisions of the ECCTA will be rolled out in stages with the initial ones being less significant. Regardless, they will still have practical implications for all UK-incorporated entities.
So what does it mean for you and your business?
March 2024
4 March 2024 was a crucial date for UK businesses as the various provisions of The Economic Crime and Corporate Transparency Act 2023 were implemented. Although it was only an initial rollout there is no doubt that the changes mean a new level of scrutiny and regulation at Companies House.
These include:
New regulations regarding company names.
Tighter rules for registered office addresses.
Registered email address requirement.
Greater power to request information/evidence.
Statement that future activities will be lawful when filing a confirmation statement.
Improved data sharing with other government and law enforcement bodies.
Company Registered Office
One of the major changes is with respect to the regulations regarding a company’s registered office. Companies must now maintain a ‘suitable address’, in other words, a physical address where someone representing the company can officially acknowledge receipt of correspondence. Crucially, this means that a PO Box is no longer acceptable as a registered office and, if a company is using one, it must be updated immediately.
If Companies House considers an address unsuitable they will commence deregistration proceedings and assign a ‘default address’ as Companies House. Affected companies will then have 28 days to update their address and provide proof that they are associated with that address.
In addition, companies must now provide a designated email address. Something that will be required upon incorporation for new companies and upon filing of a confirmation statement for existing ones. It is worth noting that the designated email address will not be published on the register.
Failure to maintain a current email address and appropriate physical registered office address will constitute a legal offence.
Changes to Companies House filing rules
Although not included in the initial rollout, there are plenty of other changes in the pipeline that will be implemented in the near future.
Firstly, companies that are classified as being small or micro (essentially any business with an annual turnover of less than £10.2m) will be required to file profit and loss accounts for the first time. This proposal is designed to improve transparency for creditors as well as make it easier for the authorities to confirm eligibility for such things as audit exemption.
Other accounts related changes include:
A requirement for accounts to be filed digitally and fully tagged using iXBRL.
The removal of a paper filing option for most companies.
The requirement for a company relying on an audit exemption to provide an additional statement by the directors on the balance sheet, confirming the exemption being relied upon, and that the company meets the qualifying criteria.
The requirement for small companies to prepare a directors’ report.
Giving the Registrar the power to require all the parts of a filing to be delivered together to facilitate the digital filing of more complex accounts.
Limiting the number of times a company can shorten its Annual Reporting Period.
There is no timeline for the rollout of these measures, but they are widely expected to be in force by the end of 2025.
How can we help?
Our existing clients can use our office address for their registered office. This has the added benefit of ensuring that we receive all official company correspondence directly, which we can then assist with more efficiently.
We have extended this service to include a designated email address for our existing clients.
With respect to the changes in Companies House filing requirements, we are already able to ensure that all of our clients will be compliant.
Talk to us
If you would like clear, concise, and easy to understand help and advice on any issues that you are concerned about, then you can contact us on 01474 326224. Alternatively, visit our website or email us info@atnpartnership.co.uk.