Major changes coming at Companies House - all you need to know

A huge shake-up is afoot at Companies House, with the biggest changes in its 175 year history in the offing.

The plan is to improve the transparency and accuracy of the information it holds and what it knows about businesses. It also aims to give Companies House more power and get it fighting fit for the future.

As it stands, the reforms have been recommended and consultation period has happened – now we wait to see what will roll out.

What do these proposals include?

With several main themes, we have summarised the key points for you here:

  1. Increased transparency: The plan is to increase the visibility of who sets up, manages and controls a business. This includes being able to more accurately link individuals with companies and limit the number of directorships someone can hold.
  1. Identity checks: The proposal is that directors, persons of significant control and those filing information (this includes accountants) will need to verify their ID. This may also be rolled out to shareholders.
  1. Accuracy of data: The aim is to improve the accuracy of information on the register. The intention is to give Companies House the power to query information ahead of publishing it and remove anything inaccurate. This will include accounts filed by a business.
  1. Two registers: The proposed changes would see the introduction of public information and non-public sensitive information. The latter would be subject to strict controls, supplied to likes of credit checking agencies, as well as certain public bodies, like the Police. Only authorised and identified people would be able to file information.
  1. Embracing digital: The Minister for Small Business, Consumers and Corporate Responsibility says that the transformation of Companies House is a “great opportunity” to deploy the latest technology, which will create a more informative, responsive and reliable register. All systems and services will become ‘digital first’.
  1. Shift in power: This would allow Companies House to act on incorrect information, rather than just holding and publicising it. This is an important step, giving them more ‘teeth’ than they ever had before. Companies House would be able to cross-check data against that held by other organisations, exchange intelligence and identify possible criminal activity more readily.

Why is this happening?

The Government wants the UK to be the best place to start and grow a business, with a transparent and attractive business landscape. It feels Companies House needs greater scope to combat economic crime and improve protection for businesses. This is partly about futureproofing Companies House, as well as giving it a significantly more robust function. The fundamentals of what Companies House does won’t change, but how they do it will.

What stage in the process are we at?

The Government published its consultation on corporate transparency and register reform in May 2019. A consultation period was then launched to provide feedback on the proposed reform, which closed in August.  The register currently includes over 4 million businesses already, so it will be interesting to see how many made their voices heard.

What do you need to pay attention to?

Aside from the key points laid out above, the Government also wants to bring in a more uniform format for filing accounts, to allow for easier automated checks and better analysis. Additionally, it has been spotted that the shortening of accounting reference periods is open to being abused; potentially because a company is experiencing financial difficulties or to conceal fraudulent activity. Working with HMRC, there is an investigation into this, and we should expect some changes to the submission requirements.

What else is changing?

Companies House has already started making significant shifts. It has already begun a transformation programme, which is focused on having the right staff in place, excellent systems, and offering the best services they can. Change is afoot, and if all the proposals outlined here are to proceed, we will witness the biggest reform to the UK’s company registration framework since it started in 1844 – these are changes that have been a long time in the making!