Jack Herbert, accountant at Burgis & Bullock, provides information and analysis of the latest measures being introduced by Companies House as a result of The Economic Crime and Corporate Transparency Act (ECCT) in our latest blog.
New measures will be coming into force from Monday, March 4 2024, with further changes on the horizon and new fees for using Companies House services also being introduced.
The UK government is cracking down on financial crime, and transparency has been highlighted at the core of this strategy.
In October 2023, the Economic Crime and Corporate Transparency Act (ECCTA) 2023 was introduced as a part of a major overhaul for the government’s framework in regards to financial crime.
We are now starting to see the impact of this for businesses in the UK with the initial set of new powers from Companies House being introduced.
Many businesses may not be aware of the changes coming into force.
There are a number of changes which are more immediate and will be introduced from March 4 2024, with the biggest change being the changes to identity verification, but more on that later!
The key changes from March 2024
Registered email addresses
A new requirement being introduced compels all companies to give a registered email address to Companies House, rather than only a registered office address. Companies House have been clear that this won’t be available on a public register, so rest assured that your inboxes are safe from spam mail!
This will mean that new companies being incorporated will have to provide an email address, while existing companies will have to provide a registered email address when they next file their confirmation statement.
This will work in the same way as a registered office address and companies will have a duty to maintain an appropriate registered email address, and not doing so will be considered as committing an offence!
Businesses can choose the email address they include; it could be an email address provided by your accountant or their own address so they receive correspondence from Companies House directly.
We are working through this change with our clients currently and if you have any questions we would urge you to get in touch as soon as possible – and definitely before your next confirmation statement.
The change isn’t anything to worry about, but it is a change that will need action.
Statement of Lawful Purpose
On incorporation of a company the shareholders will have to confirm they are forming the company for a lawful purpose – and for each confirmation statement will be required to confirm the company’s intended future activities are lawful.
Companies House online services will prompt businesses to do this when they file their next eligible confirmation statement.
We anticipate this will be nothing more than a tick box exercise and is only being introduced to make clear that all companies on the register have a duty to operate lawfully.
Registered office address
Alongside the new rules for email addresses, there are new rules being introduced for registered office addresses. This fundamentally means that companies must have an ‘appropriate address’ as their registered office at all times.
This means that businesses won’t be able to use a PO Box as a registered address; however you can still use a third-party agent’s address if it meets the conditions set by Companies House.
You can continue to use your accountants address as your registered office. An appropriate address is one where:
- 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 acknowledgement of delivery.
Businesses must look at changing this as a matter of urgency, as if they don’t have an appropriate address they could be struck off the register! If it isn’t changed and Companies House makes contact, the business will have 28 days to provide an appropriate address and evidence of a link.
At Burgis & Bullock we are on-hand to assist if required for any clients that need to make this change, and we will be making contact with clients if their registered office is a PO box.
We don’t expect this change to impact many businesses, especially in our client base, but again it is something to be aware of.
Fees
As a result of the new powers and responsibilities being introduced, Companies House will be increasing its fees to bring them in line with the cost of providing services under the ECCT act.
Many of the fees will be already factored into the fees with your accountant, however, the headline change is the annual fee for a confirmation statement (digital) will be increasing from £13 to £34.
If you are interested in the full list of new fees, they are available here.
Why are these changes being introduced?
The measures all come down to accountability and transparency. It will ensure the government can attribute financial crimes more easily and hold those companies to account.
The key changes which will impact most businesses are the email addresses and registered office address.
The goal of this is to ensure there is unimpeded two-way communication with businesses, removing any contact addresses from the system which may not be regularly checked.
Many of the processes introduced are focused on improving the quality of data available for Companies House. The greater powers will allow Companies House to query information and make stronger checks on the registered addresses of a business.
What other measures will be introduced under the ECCT Act?
The areas we have already outlined will be the more immediate changes for businesses to be aware of. However, there are other measures being introduced further down the line as a result of the ECCT Act coming into force.
At this stage we are waiting for further information on how these will look in practice, including the landmark identity verification changes, which will aim to increase public confidence that people who run businesses are who they say they are.
Identity verification
Anyone setting up, running, owning or controlling a company in the UK will need to verify their identity to ensure there is transparency around who is in a position of power at a business.
There will be the option for direct verification via Companies House or an indirect route through an authorised corporate service provider.
Improving ownership transparency
In addition to identity verification, there will be a new requirement to provide additional shareholder information and restrictions on the use of corporate directors.
Changes to limited partnerships
Limited partnerships will need to file their information through authorised agents and file more information with Companies House than they do currently.
Changes to accounts
Transitioning towards filing accounts by software only and changes to small company accounts filing options. More information will be shared on this shortly.
If you would like more information on any of the above or require expert advice, please contact the team today by calling the office on 0345 177 5500.