Companies House Reform

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) received Royal Assent on 26 October 2023. Included within the Act are a number of changes impacting the powers available to Companies House and the documents that companies file with the registrar.

There are currently 4 million sets of accounts filed at Companies House each year and annually there are 13 billion searches performed on the Companies House register. These statistics highlight the importance of the accuracy and reliability of the information filed at Companies House. The ECCTA seeks to enhance the role of Companies House in tackling economic crime by giving the registrar more power and making it harder for people to commit fraudulent activities, money laundering and tax evasion.

What are the changes?

• Small and micro entities will no longer be able to file abridged or “filleted” accounts, meaning that entities of this size will now have to file their statutory profit and loss account. In addition, small companies will also have to include the directors report in the financial statements that are filed at Companies House.
• The balance sheet statement regarding audit exemption will be enhanced to provide further assurances that the company is exempt from the requirement to have a statutory audit.
• Restrictions on the ability to shorten the accounting reference date will be introduced to bring them in line with the rules on extending the accounting reference date, ie. Can only be done once in a 5 year period, unless an exemption applies, the most common being alignment with other group companies.
• The mandating of financial statements being filed through 3^rd party software, thus removing the ability to file paper accounts or use of the current web filing service. The aim of this is to improve the accuracy and security of the financial statements being filed. This requirement will only apply to financial statements with web and paper filings still being permitted for other statutory filings.
• Companies House will require all directors and people with significant control to verify their identity at the point of incorporation. For existing companies, there will be a one year transition period to provide this information when the confirmation is due.

The ECCTA is being introduced in phases and it is expected that the identity verification requirements will be in place by Autumn 2025. It has not yet been confirmed when the changes in relation to small and micro company financial statement filings and mandatory filing via software will be brought in.