Companies House – new important changes coming!
First published on 02 February 2024 by Alastair
- Accounts News
- General News
Last November, I reported that HMRC was going to allow your competitors to see your P&L. At that time, we suggested that, although the measure would enable more of a crack-down on fraud, it would also have unintended consequences. Now comes news of the next tranche of changes being introduced by Companies House. These are quite onerous, especially for small businesses, so at M&S we felt it would be useful to summarise what they mean and how we can help you navigate them.
The first wave of changes will come in on 4th March 2024 at the earliest and will mean:
- Companies House will have greater powers to query and request supporting evidence
- Stronger checks on company names
- New rules for a registered office
- Requirement for all companies to supply a registered email address
- Requirement for all companies to confirm they’re forming the company for a lawful purpose when they incorporate, and to confirm its intended future activities will be lawful on their confirmation statement
- Annotations on the register to make information less confusing/misleading
- Data cleanse of the register to remove inaccurate information
- Sharing data with other government agencies.
The way in which all these requirements dovetail is complex at times, made more so by the fact that there are a number of other proposed changes to which we have been alerted but which currently do not have an implementation date. With the caveat that some of the following may change in the near future, here is what we know so far….
Authorised Corporate Service Provider
Third party agents (such as accountants or other company secretarial specialists) will have to become an Authorised Corporate Service Provider with Companies House. Currently this is in the testing phase and no guidance has been released on what this will look like or when this will come into place. As always, M&S Accountancy and Taxation will remain on top of this for our clients and as soon as the guidance is released, we’ll work on satisfying any requirements in place for us to support you as and when needed.
- Companies House will require a registered email address for all businesses. Note, this will NOT be visible to the public through the registrar. Existing companies will need to give this with their next confirmation statement after 4th March 2024 at the earliest, but please note that secondary legislation is still to be enacted to confirm this.
- There will be a statement for the company to approve which confirms that the future activities of the company will be lawful.
Filing accounts via software
- This is to be phased in over the next two to three years. A timetable is still to be released but most companies already file this way, as it has been the most efficient way of submitting financial statements for a while now. The process is known as iXBRL (inline eXtensible Business Reporting Language) and allows for pre-set information (or “tags”) to be picked up automatically by Companies House or HMRC regardless of how the financial statements are presented.
- Companies House is to release further guidance for those companies that this is currently not available for, but unfortunately currently no timeframe for this guidance has been given.
- A P&L will need to be filed for both small and micro-entities. The details of this requirement is still to be set out in secondary legislation.
- Small companies which do not qualify as micro-entities (i.e. companies which have two of either: turnover higher than £632,000, a balance sheet over £316,000 or employee numbers over 10) will need to file a directors’ report alongside the financial statements being submitted.
- An audit exemption statement is required to be put on the balance sheet of accounts (this will be very similar to what is already included in accounts produced by M&S).
Your company registered office
- The definition is being changed to an “appropriate address,” meaning:
- Any documents sent to the registered office should be expected to come to the attention of a person acting on behalf of the company
- Any documents sent to that address can be recorded by an acknowledgment of delivery. This means that a PO box can no longer be used.
Powers and actions
- Companies House will have much more power to challenge and query any information about your business that is held on the registrar: in particular there will be more enforcement on misleading names or inaccurate information held.
- If you do not respond to a request for more information by Companies House then they can:
- Levy a financial penalty
- Put an annotation on the company’s record
- Begin prosecution
- All directors and people with significant control over your business will be required to have an identity check completed.
- For new companies, this will happen automatically
- Existing companies will have a transition period to meet this requirement, as well those acting on behalf of companies prior to being able to file (i.e. accountants such as M&S)
- This new requirement will be similar to the identity checks and information you already provided to us for AML (anti-money-laundering) purposes.
- No guidance has yet been given to agents (i.e. accountants such as us) on this.
Companies House fees
- Fees will be going up but, sadly, at present there is no word by how much or when this will apply.
Suppression of personal information
- Personal information on historical documents can be suppressed from public view - this includes:
- Residential addresses when shown elsewhere i.e. as a registered office.
- Day of birth (if shown)
- Business Occupation
- There are additional measures for those vulnerable to a risk of physical harm i.e. domestic abuse survivors
- Limited Partnerships must disclose the following information through an authorised agent:
- Name, Date of Birth and usual residential address
- Verify identity
- Registered UK office address
- Provide a SIC code
- File confirmation statements
- New powers for Companies House will include:
- Close and restore partnerships
- Apply sanctions
- Protect partners’ information
- Statutory compliance process
Additional shareholder information
- Record full names of individuals, corporate members of firms in registers
- Provide a one-off, full shareholder listing for Companies House to display
- Companies House will:
- Collect and display more information from companies claiming an exemption to provide these details including reason for exemption
- Collect and display conditions meaning a legal entity is recorded as a PSC (person with significant control)
As always, if you have any queries on any of the above (and we’ll be surprised if some of you don’t), then please get in touch and we’ll help you get it right!
Callum McKinnon, M&S Accountancy and Taxation