Policy & Compliance
The Economic Crime and Corporate Transparency Act 2023: An update
Companies House has provided a timeline for changes that will result in more reliable and accurate information on which to base key decisions
T he Economic Crime and into law on 26 October 2023. The Act results in substantive changes to Companies House (CH) that will affect BIFA Members. On 16 October 2024, BIFA attended the event 'Changes to UK Company Law’ held by CH to update stakeholders on its current and future changes. CH reported that it is undergoing its most significant change since 1884. Historically, CH has had limited ability to verify or challenge Corporate Transparency Act 2023 (The Act) was passed the information provided to the register; it also had very limited enforcement powers, with most cases requiring a court order, which is both time-consuming and expensive. This led to UK residents, without their consent or knowledge, having tens of thousands of companies using their residential address as a company address. These cases indicate a high incidence of economic crime, negatively affecting the wider economy. Widened remit The Act has widened CH’s remit to become an “active gatekeeper over company creation and custodian of more reliable data concerning companies”. This means that CH can now query, challenge and remove incorrect or false information without needing a court order. CH has also been provided with data- sharing powers so that it can work with public and private sector bodies to prevent economic crime. Since the implementation of the Act, CH has already removed false information relating to 72,000 UK companies and its intelligence
team has provided over 300 detailed reports to law enforcement agencies.
verification transition and compliance activity by CH will commence. CH will provide further details on how to verify an individual’s identity by spring 2025. However, standard documents, such as passports or driving licences, will likely be accepted. We advise BIFA Members to comply with the identity verification requirements in good time to avoid non-compliance, which can result in financial penalties. Wide bene fi ts BIFA welcomes the efforts made by CH since the Act's implementation and we are hopeful that the continued work by CH will be beneficial to our Members and the wider UK economy. For instance, Members will benefit from having more reliable and accurate information on which to base key decisions as to whether a trader is ‘established’ in the UK or not. BIFA will keep Members up to date on any changes to CH’s provisional timeline.
The efforts of CH are of interest to BIFA Members because they have long struggled to trust the information stored by CH; this has made tasks such as undertaking due diligence on customers and suppliers more difficult. We are hopeful that the cleaning up and safeguarding of the information will enable our Members to have greater faith in the register’s integrity. CH provided stakeholders with the timeline for further changes, which is available at GOV.UK (see QR code). Members should note that CH is now implementing one of the changes with the Act, being the requirement for directors and people with significant control to verify their identity. This will be a phased approach and the (provisional) dates are as follows: • Spring 2025 – Individuals can voluntarily verify their identity. • Autumn 2025 – All existing directors and people with significant control must verify their identity within 12 months, and all new directors and people with significant control must verify their identity at the time of registration. • Spring 2026 – Anyone filing information with CH must verify their identity. • Autumn 2026 – End of identity
“ The Act has widened CH’s remit to become an “active gatekeeper over company creation and custodian of more reliable data concerning companies”
If you have any questions regarding the changes to CH, please contact the Policy and Compliance team (j.mckean@bifa.org and r.windsor@bifa.org).
Economic Crime and Corporate Transparency Act: outline transition plan for Companies House - GOV.UK
18 | December 2024
www.bifa.org
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