By Annie Makoff Anti-money launderingCompanies House reforms: what you need to know19 Feb 2025 AAT and Finance professionals discuss how they think businesses will be affected by changes.As part of the Economic Crime and Corporate Transparency Act 2023 (ECCTA), Companies House has been granted new powers to assess and verify information provided by businesses on the UK company register and act swiftly against non-compliance.The reforms, which are being carried out in several phases between March 2024 and 2027, are the first such wide-sweeping changes since the register was set up in 1844.In March last year, Companies House began the first phase of the reforms, including querying and verifying company information and/or rejecting or removing anything found to be inaccurate or false. Companies House has also been given powers to share relevant information with law enforcement agencies and other government bodies.Companies House have now published the latest timetable for each phase but these dates could change pending parliamentary delays:From 25 February 2025Companies House will start to remove/strike off any falsely-listed companies.Third-party providers carrying out verification and identity checks will be required to register as official Authorised Corporate Service Provider (ACSP) from this date. ACSPs must be supervised by one of 25 possible UK supervisory bodies including AAT, HMRC or Financial Conduct Authority.From 25 March 2025Individuals (Directors, Persons of Significant Control, LLP members etc) will be able to verify their identity on a voluntary basis, initially.Summer 2025 Companies House will allow ‘access on request’ to certain information available on the Register of Overseas Entities.Companies House will assess, verify and act as appropriate on individuals ‘seeking to suppress’ their birth date relating to documents registered before 10 March 2015. These documents may include false signatures, home addresses or nature of business.Autumn 2025Identify verification will become compulsory from this date for all new company incorporations and newly appointed directors and Persons with Significant Control of a company (PSC).Companies House will start to implement the 12-month transition phase which will require over seven million existing directors and PSCs to verify their identity as part of annual filing of confirmation statements.These reforms will impact both accountants and their clients due to stricter verification processes required by Companies House. These will apply not just when registering a new company, but each time there’s a change to existing details, or amending or adding a PSC. The increased Companies House fees which went up in May 2024 will also have an impact.We asked accountants across practice and industry for their views on these changes, including implications for businesses, and what changes they’d like to see.We support the measures being brought in to prevent deliberate abuse of the registersDonna Drew, AAT Professional Standards Policy ManagerMoney laundering is estimated to cost the UK more than £100 billion a year. Whilst we understand the concerns some firms may have around the initial impact of the reforms on business costs, we believe the reforms are vital to the UK’s fight against economic crime. The identity verification measures in particular will prevent the creation of anonymous corporate structures, meaning exploitation by criminals will become far more challenging.In addition, the Registrar’s power to query and challenge information will improve the accuracy and quality of the data, which will reduce the deliberate abuse of naming processes that suggest illegitimate links to established firms and prevent misleading or offensive naming of companies.To ensure compliance, accountancy and bookkeeping firms should familiarise themselves with the changes to UK company law. AAT firms wishing to register as an Authorised Corporate Service Provider (ACSP) should also read AAT’s article on how this may impact them.Verdict: As an anti-money laundering supervisor, AAT is particularly concerned with, and supportive of, any measures intended to limit the opportunities for companies to use fraudulent information on the register to hide money laundering activity.We’re cautiously optimistic about effective introduction of reformsPaul Beare, Founder and MD, Paul Beare LimitedThe importance of Companies House shouldn’t be underestimated – an effective and well-tuned companies register is vital for the efficient operation of the UK economy. So it’s natural that any changes will cause some alarm to those of us who engaged in important client work that involves Companies House.The introduction of stricter requirements for maintaining accurate records is essential – it’s something we believe will be beneficial for accuracy of information. We’re hopeful that the new laws will give confidence that the information held on Companies House will be correct moving forward.Critically, from 25 February 2025, Companies House will be able to challenge incorrect information and will be able to remove false companies from the register. This is a huge step forward in the battle against fraud and financial crime, so it should have widespread support.With that said, as with any new law, the devil is in the detail: we’re waiting to see how the new Registration for Authorised Corporate Service Providers (ACSP) service plays out in practice. Getting that right will be vital in the journey towards a more robust compliance environment on Companies House so we’re very supportive of the principles and cautiously optimistic about their effective introduction.Verdict: We’re supportive of the principles of the Companies House reforms and cautiously optimistic about their effective introduction.Confirmation statements should be required only when there’s something to updateJamie Skelding, Director, Prime Accountants GroupMost businesses aren’t aware of the impact these changes could have. Human nature, particularly when it comes to tax or legislative changes, is to act only as and when you have to and many of these changes won’t be mandated until 2026.It feels like yet more bureaucracy getting in the way of business, as it’s only fairly recently that Companies House reviewed its charges. These led to some routine costs doubling or trebling in some cases.However, the premise is quite straightforward – driven by a wider push for transparency about who is actually running a company and a reduction in allowed time to notify of any changes.There are situations where people can muddy the waters on purpose, or where one person might own multiple companies that are not necessarily connected up on the public register due to different name variations. Under the new rules, they won’t be able to hide anything.On the other hand, a sole director of a simple company will still be affected by these changes, even though they’re unlikely to try to hide their identity.In terms of changes, I’d question the value of mandating every business, regardless of size, to submit an annual confirmation statement. There could be a case for businesses to only update if there are changes to be made, rather than telling Companies House that nothing has changed and paying a fee for that privilege.A small company has the same compliance responsibilities as much bigger companies. Businesses should be treated in accord with their complexity of their circumstances and the systems adapted to recognise that.Verdict: Companies should only have to submit confirmation statements if there is something to update rather than paying a fee just to tell Companies House that nothing has changed.Companies House reforms will affect business costsAlistair Roman, chartered accountant, Founder, Cost Optimisation ConsultancyAccountants will need to be fully aware of Companies House changes in order to understand where and how best to support their clients. For example they may need to: help clients meet the new requirements for registered office and email addresses, confirming the business’s ‘lawful purpose’, annual confirmation statements and transitioning to online accounting softwarereview client details to ensure complianceadvise clients on how to meet the new identity verification requirements.While we appreciate the need for these changes, concerns remain around what impact they will have on business costs in an environment where margins are already stretched, trading conditions are tough and the increase in Employer NI contributions is almost upon us.To what extent the likely increase in business costs is passed on to the end consumer, only time will tell.Verdict: We have concerns about the impact that Companies House reforms – while necessary – will have on business costs.‘Accidental slip-ups’ could treated as deliberate non-complianceDarren Mercieca, chartered accountant and CFO, Kiwi BetsThe Companies House reforms coming into effect on 25 February are a big shake-up for UK businesses. These changes are about tightening up company records and cracking down on fraud. The goal is to make sure businesses operate more transparently and that dodgy actors can’t hide behind fake names and shell companies.One of the biggest changes is that directors and people with significant control (PSCs) will need to verify their identity. This takes effect immediately for new businesses, although current directors and PSCs have a 12-month grace period to comply. Although this could help combat fraud, businesses may need some time to catch up due to the phased deployment, and there may be some initial uncertainty.Another change is how quickly Companies House can now strike off businesses set up with false information. That’s great for removing bad actors, but it also means businesses need to stay on top of their records. Any slip-ups could cause unnecessary headaches, so accuracy in filings is more important than ever.A new system is coming in where Authorised Corporate Service Providers (ACSPs), like accountants and solicitors, can verify identities on behalf of clients. That could make life easier for businesses, but it also puts more responsibility on service providers to follow anti-money laundering regulations properly. The question is whether businesses, especially smaller ones, are ready. Some people could suffer if they don’t receive clear instructions since they don’t have the tools or knowledge to quickly adapt.Verdict: Smaller businesses may not be ready for Companies House changes and there’s the risk that accidental slip-ups could be treated as deliberate non-compliance.Would you like to contribute to future articles like this one? If so, please get in touch with Annie Makoff-Clark at [email protected]. Annie Makoff is a freelance journalist and editor.