The UK’s existing corporate framework is undergoing the most comprehensive overhaul in years.
The Economic Crime and Corporate Transparency Act 2023 (ECCTA) received Royal Assent in October 2023 and is being rolled out in phases over a number of years. This will affect almost every business operating in the UK, from startups and family-run companies to large international corporations.
The ECCTA is designed to improve transparency, crackdown on fraud and shift Companies House from a passive registrar into an active gatekeeper of information. Many of the reforms are already in place, but others are fast approaching.
So what are the changes and what should your business be aware of going forward?
Reforms already in force
The following provisions are some of those that have already taken effect:
- March 2024: Companies House gained the power to query and reject information suspected to be wrong or fraudulent without requiring a court order. Those incorporating a new company or filing a confirmation statement are now also required to confirm that the intended activities of the company are lawful and to provide a registered email address in addition to the physical registered office.
- May 2024: Filing fees saw a significant increase. The cost to incorporate a company online increased from £12 to £50 while the cost to file the annual confirmation statement increased from £13 to £34. The additional revenue is used to fund investigation and enforcement activities against those misusing the register.
- January 2025: Individuals can now apply to suppress their home addresses from public view on historical records where it was used as a company’s registered office. Other information such as signatures and full dates of birth, recorded prior to the changes in 2015, will be able to be suppressed later too.
Reforms yet to take place
The following measures are amongst those still to come into force:
- 1 September 2025: a new offence will be created for the failure to prevent fraud. Large organisations will be able to be held to account for fraud committed by those associated with them if they do not have the right procedures in place to prevent it.
- Autumn 2025: Identity verification will begin to become mandatory for directors and persons of significant control (PSC). The requirement to hold registers of directors, secretaries and PSCs will also be removed but companies will still be required to keep this information up to date at Companies House.
- Spring 2026: Anyone presenting filings to Companies House will be required to verify their identity. In addition, any third-party agent submitting filings on behalf of a company must be registered as an Authorised Corporate Service Provider (ACSPs).
- 1 April 2027: A number of changes will come into effect focussed on accounts. Amongst other things, companies will no longer be able to file abridged accounts and small companies and micro entities will also be required to file a profit and loss account for the first time. All companies will be required to file their accounts using software rather than paper or web filing.
What these changes mean for your business
The ECCTA marks a significant transformation in the role and powers of Companies House and has already implemented major reforms. With further significant reforms inbound, businesses must take proactive steps now to ensure they are ready.
In short, these reforms require businesses to adopt a more compliance-focused mindset when interacting with Companies House. Taking steps now is essential to reduce the risk of enforcement action and fines and to ensure that your business is well-positioned to the meet the requirements of a stricter corporate transparency regime.
This article is the first in our series on the ECCTA in which we will be exploring some key areas in greater depth and what the changes mean for your business. The next article will take a closer look at the new offence of failure to prevent fraud.
Contact Gail Vallis and Milo Brooks or our Corporate team to see how we can best assist you and your business here.