Guide to the changes to UK company filing 2023/24 & Companies House reform

Guide to the changes to UK company filing 2023/24 & Companies House reform

Royal assent was granted in October 2023 for The Economic Crime and Corporate Transparency Act. This Act sees widespread reform and changes to current rules for businesses and their relationship and requirements with Companies House.

The Economic Crime and Corporate Transparency Act creates a more significant role for Companies House to play in tackling economic crime and supporting economic growth. The measures in the Act will lead to improved transparency and more accurate and trusted information on Company House registers.  

There will be new responsibilities for: 

• all new and existing registered company directors 
• people with significant control of a company (PSCs) 
• anyone who files on behalf of a company 

In this blog, we'll cover the key changes covered by this act and new legislation.

What are the new measures to UK company law?

The new measures of this act will:

• broaden and give new powers to Companies House to become a more active gatekeeper over company creation and improve the reliability of data 
• ensure that more reliable and accurate financial information is kept on the company register, reflecting the latest advancements in digital technology and help business owners to make better business decisions 
• provide more effective powers of enforcement to Companies House and increase their ability to share relevant information with partners and law inforcement agencies
• protect individuals from fraud and other harms by enhancing the protection of personal information.

The measures are designed to crack down on economic crime and potentially fraudulent companies.

Enhanced Companies House investigative powers

The act will enhance the powers that Companies House have to clamp down on fraudulent organisations and verify company directors. It also strengthens anti-money laundering powers, particularly around information sharing, improved transparency and the seizure and recovery of crypto assets.

Identity verification

Identity verification will be required for anyone setting up, running, owning or controlling a company in the UK.

Correct and reliable financial information

Filing accounts

There is a focus on transitioning all companies towards filing accounts by software only, and changes to small company accounts filing options.  

This transition is designed to ensure efficient and secure filings for all limited companies and should improve the quality of the data on the Companies House register.

It is imperative that companies find suitable software before web-based and paper filing options are no longer available.  This will apply to directors who file accounts themselves, and companies who use third party agents or accountants to file their annual accounts. 

Whilst this is due to be phased in over the coming 2-3 years, there is no set timetable released yet by Companies House, so our advice to anyone not currently using online accounting packages, to begin to switch over as soon as possible.

Changes to small company filing options

For small and micro-entity companies, Companies House are streamlining the accounts filing options.

Small and micro-entity companies will need to file their profit and loss accounts.

Your company will be ‘small’ if it has any 2 of the following:

• a turnover of £10.2 million or less
• £5.1 million or less on its balance sheet
• 50 employees or less

Micro-entities are very small companies. Your company will be a micro-entity if it has any 2 of the following:

• a turnover of £632,000 or less
• £316,000 or less on its balance sheet
• 10 employees or less

Secondary legislation will detail what they will need to include. Small companies that do not qualify as micro entities will also need to file a directors’ report. There will also be the removal of option of filing 'abridged' accounts.

Claiming an audit exemption 

Companies claiming an audit exemption will need to give an additional statement from their directors on the balance sheet.  

Directors will need to specify which exemption is being claimed and confirm that the company qualifies for the exemption.   

Your company may qualify for an audit exemption if it has at least 2 of the following:

• an annual turnover of no more than £10.2 million
• assets worth no more than £5.1 million
• 50 or fewer employees on average

Confirmation statement changes

Currently every UK company, including dormant and non-trading companies, must file a confirmation statement at least once every year, even if there have not been any changes during the review period. A confirmation statement is designed to confirm the information that Companies House hold about that company is up to date. 

The changes in the Act will mean that there will additional information to complete on the confirmation statement. This additional information requires all companies to confirm every year that the intended future activities of the company will be lawful. 

This will apply to all confirmation statements with a statement date from March 2024 onwards.  

Registered office address

There are new rules for registered office addresses which will mean all companies must have an appropriate address at all times. Companies will not be able to use a PO Box as their registered office address.

Registered email address 

All companies will need to provide a registered email address. This email address will not be available to the public domain. Companies House will use the email address to communicate with the company.  

This will be a requirement for existing companies when they file their next confirmation statement from March 2024.

Registered email addresses will be required for all new companies that are incorporating with Companies House. This will be required by companies that incorporate, from March 2024. 

Improving transparency of company ownership

Companies will be required to provide additional shareholder information, and restrictions on the use of corporate directors.  

Changes to limited partnerships

Limited partnerships (LPs) will need to file their information through authorised agents, and they’ll need to file more information with Companies House.

When the measures come into force, LPs must:  

• provide partners’ names, date of birth and usual residential address 
• verify the identity of general partners 
• provide a registered office within the UK 
• provide a standard industrial classification (SIC) code 
• file an annual confirmation statement  

LPs will need to file their information through an authorised agent (also known as an Authorised Corporate Service Provider) that’s registered with Companies House. This is to make sure the data is trustworthy and fit for purpose.  

There’ll be new powers to: 

• close and restore limited partnerships 
• apply sanctions 
• protect partners’ information  
• operate a statutory compliance process  

These measures will need secondary legislation before they’re implemented.  

Investigation, enforcement and data sharing

Companies House will have the ability to implement more effective investigation and enforcement powers to share data on individuals and company information with law enforcement agencies and other government departments.  

Data protection

Individuals will have the ability to suppress personal data from historical documents and apply to have their personal information protected from public view to prevent risk of harm.

Register of overseas entities

The Register of Overseas Entities came into force in the UK on 1 August 2022 through the Economic Crime (Transparency and Enforcement) Act 2022. The register is a key driver of the government’s strategy to tackle global economic crime. 

Overseas entities who buy, sell or transfer property or land in the UK must register with and notify Companies House who their registrable beneficial owners or managing officers are. 

The transition period for this change ended in January 2023, and there are already more than 30,000 entities registered. More than 9,000 update statements have been filed so far, and penalties have begun to be issue for non-compliance with the legislation.

Will the changes effect all UK companies?

The changes effect UK limited companies and limited partnerships, including dormant and non-trading companies.

What are the aims of the new measures to be put in place?

This wide reaching legislative reform introduces a series of changes designed to strengthen Companies House powers in the UK and create a fairer and more transparent business environment. It is believed it will deliver improvements for the UK economy, for businesses, and for individuals.

What should your company do?

The implementation of these changes and new regulations will require system upgrades and secondary legislation from Companies House, meaning some aspects, like identity verification, may not be immediate. Initial roll-out of many of these reforms will happen early in 2024.

Early measures rolled out will include enhanced scrutiny of information by Companies House, stricter checks on company names, new rules for registered office addresses, mandatory requirement of a registered email address, and annual confirmation changes.

However, you should begin to prepare for these changes by talking to your accountant about what it means for you as a director/shareholder and the company.

If you are not currently using online accounting software, then you should work with your accountants to begin the transition now.

Conclusion

If you would like to discuss how these changes will impact your accounting, your annual filings or information submitted, speak to a member of our team today. Contact our team today in Wirral, Liverpool or Chester.