Keith Senior, of Jacobs Allen, warns that Companies House will soon need more information from business owners

As part of the government’s strategy to tackle economic crime, it has been announced that there is to be a reform of Companies House’s role and the information it holds.

In a future Economic Crime Bill, a number of measures are to be legislated for and company owners should consider this increased disclosure and protection at Companies House, which will affect them.

Amongst these, which affect UK owners are:

- Further mandatory identity verification

- Quality of information provided is to be improved with the mandatory inclusion of profit and loss account details

- Power for Companies House to query and remove invalid information

- Filing processes to be streamlined and digitised

- Better protection of personal data for directors to prevent fraud

Taken together, these changes move Companies House from being a passive receiver of information, the quality of some of which at present is questionable, to being much more actively involved in checking and validating information presented to it.

Private companies will be required to provide a full shareholder list with annual updates, and small or micro companies, being the majority of companies on the register, will have a standard format of filing all constituent parts of their accounts. This will lead to greater disclosure than is currently required.

As might be expected, non-compliance or delayed responses to Companies House’ requests will be met with a new penalty regime.

No timetable has yet been given but it is anticipated that the measures will be introduced as part of the Economic Crime Bill over the coming months.

These changes should be viewed alongside changes to Corporation Tax rates from 2023 that will the following year be 6 per cent higher than the basic rate of income tax for an individual. This means that many micro or small businesses will face higher costs in terms of the increased administration costs and taxes, as well as facing public disclosures, by operating their business with a company structure rather than as an unincorporated business.

Owners and directors of such businesses should therefore take a close look at this to prepare themselves for the future.

-- Keith Senior is a director at chartered accountants Jacobs Allen