It’s a new tax year, and the sun is shining (for the moment). It feels like the time to sit back and take it easy. However, Companies House has decided to bring in a number of changes to challenge us and keep us on our toes!
Who are Companies House anyway?
Companies House is the official registrar of companies. They are responsible for incorporating and dissolving companies, maintaining public records, and ensuring compliance with statutory filing requirements. They are completely separate from HMRC (His Majesty’s Revenue and Customs). HMRC is the government department responsible for collecting taxes and enforcing tax laws.
Why the need for change?
The Economic Crime and Corporate Transparency (ECCT) Act 2023 meant that changes have to be made to the way that Companies House operates. Changes are being brought in over the next few years to combat fraud, money laundering, identify theft and other economic crime. The general reason for the change is for Companies House to become a “more active gatekeeper”, rather than a “passive recipient of information”. This is a good thing and should make the world a little bit safer.
Some changes have already been made
Companies House changes that have already happened with effect from 4th March 2024:
- Companies House require a company’s registered office to be “appropriate”. It can be a third party’s address, such as your accountant, but cannot be a PO Box. Be careful – companies without an appropriate address for their registered office could be struck off the register!
- A company now needs a registered email address, which must be provided to Companies House. This also has to be “appropriate” which means “in the ordinary course of events, emails sent to it by the registrar (i.e. Companies House) would be expected to come to the attention of a person acting on behalf of the company.” New companies must provide a registered email address when they set up the new company. Existing companies need to provide the email address on completion of their next confirmation statement.
- Companies House have also had enhanced powers to check details and ask for evidence. They will have the ability to scrutinise company names more vigorously and to annotate the register to avoid confusion or misleading details. According to Companies House they can now take a “more robust” approach to dealing with the information provided to them, so if you get asked to provide information (and you have checked it isn’t a fraudulent request) then we recommend going back to them quickly to avoid escalation. Worst case scenario if you don’t respond it is actually a criminal offence and could lead to prosecution!
- The shareholders of all new companies will need to confirm that they are forming their company for a lawful purpose. All existing companies will be asked to confirm this when they complete their next confirmation statement.
Companies House fees are also going up
From 1st May 2024 Companies House will be revising its fees and will also be introducing new charges. This means they will have enough income to push through all the changes. You may not know but Companies House work on a cost recovery basis, so their fees are set to cover their costs rather than to make a profit. Due to the measures introduced by the Economic Crime and Corporate Transparency (ECCT) Bill, costs for Companies House are increasing and so the fees are being adjusted in part to cover this. The increases are quite significant, if only we could all increase our charges by such high percentages! A few of the more notable fee increases are:
- The fee for new Company Incorporations is increasing by over 300% to £50.00.
- If you decide to change the company name, the cost will be increasing by over 300% to £33.00.
- If you decide to strike off the company, the filing charges will increase by over 300% to £33.00.
- The cost of the annual Confirmation Statement filing will be increasing by more than 160% to £34.00.
Future Companies House changes
There are more changes to come. These range from:
- Compulsory checks for directors and shareholders
- Changes to small company filing options
- New requirements to provide additional shareholder information
- New restrictions for company directors.
There will also be a requirement for all companies to file a profit and loss statement, which is a massive change – we do not yet know when this change will come about (if we had to put money on it we would guess 2026) but it is likely to be a bone of contention for many directors! We also don’t know whether the requirement to *file* a profit and loss statement will also mean that this will be visible on public record, but if it does it will mean your customers, suppliers and competitors will be able to see how much money you make!
We are keeping a close eye on these changes and will fill you in when more details are released – watch this space!
