Corporate and Commercial
Owner Managed Businesses
Isobel Moran
February 2025
- The Economic Crime and Corporate Transparency Act (ECCTA) has granted Companies House enhanced powers and responsibilities, the power to impose financial penalties and increased fees, a requirement for compulsory identity verification, insistence on electronic filing and measures to enhance the transparency of company ownership.
- These changes will be rolled out in phases, with full implementation expected by 2027 and all stakeholders should stay informed.
- Enhanced powers and responsibilities
In March 2024, Companies House was granted greater authority to query and challenge the information submitted by companies. This includes the power to reject or remove incorrect or fraudulent data from the register, analyse information in greater detail, and share more information with law enforcement agencies and regulatory bodies where necessary. These measures are designed to ensure that the information held is accurate and reliable, thereby increasing trust in businesses across the UK.
- Financial penalties and increased fees
In May 2024, Companies House was granted the power to impose civil financial penalties for most offences under the Companies Act 2006. This significantly widens the failings companies could be penalised for and is intended to ensure prompt compliance with Companies House requirements and deter fraudulent activities.
Companies House also increased its fees to fund these new measures. For example, the cost of incorporating a company has increased from £10 to £50 when filed digitally, and the cost of filing confirmation statements has risen from £13 to £34.
- Identity verification
A major component of the reforms is the introduction of compulsory identity verification for all new and existing company directors and people with significant control. For existing companies, the transition period will start from Autumn 2025. By spring 2026, anyone filing on behalf of a company will also need to verify their identity.
- Digital filing requirements
By 2026 to 2027, Companies House will require all annual financial accounts to be submitted digitally via software. This move is part of a broader effort to modernise the filing process and improve the efficiency and accuracy of data submissions.
- Transparency of company ownership
The Act also mandates the publication of more detailed information on company shareholders, enhancing the transparency of company ownership. This measure is expected to be a significant undertaking for some companies, and the implementation options are currently being worked through.
Conclusion
The updates to Companies House under the ECCTA are designed to create a more transparent, accountable, and secure business environment in the UK. By introducing stricter identity verification, increasing the powers of Companies House, and enhancing the accuracy of company data, these reforms aim to reduce opportunities for economic crime and improve corporate governance.
These changes will be rolled out in phases, with full implementation expected by 2027. Companies and stakeholders are encouraged to stay informed and prepare for these upcoming requirements to ensure a smooth transition. We will continue to keep you updated on upcoming key dates.
