Proposed Companies House Reforms

These reforms are designed to enhance transparency and to make tracking and investigating financial crimes simpler. However, it is worth noting that their administrative implications will have the most impact on small businesses.

The Companies House reforms include the following:

• The introduction of identity verification for all new and existing registered directors, People with Significant Control, and those delivering documents to the Registrar of Companies;

• The introduction of a new register of beneficial ownership which will seek to identify who ultimately owns and controls companies in the UK;

• Accounts will need to be filed digitally using commercial software and not via Companies House

• Anyone seeking to make filings on behalf of a UK entity must first be authorised by Companies House. This includes company secretaries, formation agents, solicitors and accounting firms.

• A company must have a registered office address which is “appropriate”, meaning somewhere that documents delivered to it would be expected to come to the attention of a person acting on behalf of the company and can be recorded by obtaining an acknowledgement.

• All companies to maintain a non-public “appropriate e-mail address” where messages can reach a person acting on behalf of the company.
• Changes to the financial information that small companies are required to file with Companies House. This includes the removal of the option for small companies to prepare and file abridged accounts and introduction of the requirement to file a profit and loss account;

• Companies House fees are expected to increase.

• New penalties for non-compliance with the requirements.

1) Who is affected by the Companies House reforms?

It is small companies that will be affected by the reforms. Small companies are defined as those that meet at least two of the following criteria:

• Turnover of £10.2 million or less
• 50 or fewer employees
• Gross assets of £5.1 million or less

The criteria means that most companies will be considered to be small companies.

2) What will be the impact of the reforms for those affected?

This will partially depend on the size and structure of the company.

• Increased compliance costs, particularly for businesses with several directors and Persons of Significant Control.
• Reduced flexibility in how companies can file their accounts.
• Greater transparency but less privacy, as more information about limited companies’ financial information will be easily available to the public.
• Larger risk of investigation by Companies House.

There will also be a requirement for all limited companies to file their profit and loss account at Companies House. Micro-entities will also need to file their profit and loss account but will remain exempt from needing to file a Director’s Report.

3) When will the reforms come into effect?

There is currently no timescale for when each of these Companies House reforms will be introduced, but the legislation is going through Parliament, after which Companies House will also need to update its systems prior to enactment. However, it is expected that these will take effect sometime in 2024.

Get in touch

If you would like further information on these areas, please contact one of the team.

Phone: 01508 333040

Email: office@abcabacus.co.uk

Website: abcabacus.co.uk