Policy & Compliance
UK to tighten rules on company transparency in fraud clampdown
Part of new the Economic Crime and Corporate Transparency Act (2023) focuses on the oversight and transparency of company structures. Previous rules have allowed fraudulent operators to go undetected
oversight and transparency of company structures in the UK. It will be some time before the full impact of this long and complex document, totalling 376 pages, becomes clear. In addition, secondary legislation and system development will be required before all aspects of the legislation can be implemented. For instance, Companies House will need to implement a digital solution for identity verification of directors; therefore this may be one of the later measures to be implemented. The legislation will have impacts for UK businesses registered at Companies House, in particular the introduction of identity verification for all new registered company directors. The legislation will considerably enhance the role of Companies House for verifying company-related data. Domestically, UK-based companies will have to review their processes and the data provided to Companies House. But at the
O ne signi fi cant concern that BIFA Members consistently express is the dif fi culty in identifying those companies that may be operating fraudulently. The most frequently cited examples are where a Non- Established Taxable Party (NETP) fails to comply with Customs legislation leaving the UK freight forwarder, who has acted as an Indirect Customs Agent on an indirect basis, with a large and unwelcome bill. The British economy is commonly referred to as being ‘open’, but it has been clear for some time that this has led to a significant increase in non-compliance and, in some cases, fraudulent activity. In fact, GOV.UK comments that information contained within Companies House and HMRC
websites cannot be completely relied upon when determining whether or not a company is established within the UK. Company structures In order to combat what is seen as significant economic crime and the abuse of the register of companies, the government introduced The Economic Crime and Corporate Transparency Bill which, during October 2023 received Royal Assent and has now passed into UK law as the Economic Crime and Corporate Transparency Act (2023) (ECCTA) . While parts of the Act deal with broader aspects, including enforcement over crypto assets, money laundering and failure to prevent fraud, much of the legislation is concerned with the
20 | December 2023
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