19.3.2024 | Tax

Companies House given new powers to combat criminal acts

For the first time, the new regime will also require people setting up companies to state that the business activities will be lawful.

This month, new measures have come into force to help Companies House combat criminal acts and money laundering.

The powers are based on the Economic Crime and Corporate Transparency Act 2023 (ECCT Act) which launched on 4 March 2024.

Rules around confirmation of company activity will become more stringent as authorities attempt to tackle the growing abuse of the company registration system.

In recent times, these abuses have been highlighted in the news, and situations often involve businesses or individuals receiving demands to their registered business addresses, citing scenarios of which they have no knowledge.

New measures
Now, Companies House will require those setting up new companies to confirm the lawful purpose of forming a company during the incorporation process to help stop unscrupulous firms being formed.

As part of the bolstered measures, all companies will now need to provide a Registered Email Address when incorporating or as part of their next confirmation statement to give Companies House further security.

Additionally, the annual confirmation statement will also now require confirmation each year, stating that the company’s intended future activities will be lawful.

Sharing of data
Companies House will be assisted in being robust with the new measures by powers to allow it to share data with other government departments and law enforcement agencies, with the aim of clamping down on illegal activity.

These new measures do mean increased fees from Companies House, effective 1 May 2024. Businesses can find out more about the fees here: Changes to Companies House fees—Changes to UK company law.

The new measures are accompanied by new criminal offences and civil penalties to help with their enforcement.

Stronger checks
As part of the rollout of new powers, Companies House will also be able to query information and request supporting evidence when necessary.

Stronger checks can now be made on company names and there will be greater ability to tackle and remove inaccurate information.

The use of PO Boxes is also being scrapped, meaning it will no longer be acceptable for a company to use a PO Box as its registered office address. Companies House has warned it will be actively checking Registered Offices on an ongoing basis. Failure to respond quickly could result in businesses being fined or suspended from the register.

Beatons Director Nick Marshall said: “Fraudulent approaches to businesses can cause a real problem. Criminals are constantly finding ways to try to out-fox companies for demands relating to bogus scenarios. These new rules should help to protect businesses and clamp down on organisations set up solely for the purpose of fraud-related activity.

“Complying with the new rules is vital, and Beatons is available to help any clients who need support.”

If you have any concerns about a communication you receive from Companies House, please contact Beatons for advice.

Email info@beatons.co.uk or call 01473 659777.

For more information on the new powers to tackle fraud, click here.