We have reported previously, when The Economic Crime & Corporate Transparency Act become law, what it was, the reason it was being brought in and a summary of the changes to be implemented. See our blog HERE.
At the time, due to the level of work/updates required at Companies House, no timeline was given for the Act’s implementation.
Companies House have now confirmed the current intended implementation timetable, including the ability to request the suppression of dates of birth from old documents held on the register, transition to compulsory identity verification for all directors and extension of the use of ID verification whenever any documents of any kind are filed on the register.
Some of the changes required parliamentary time and the measures were part of last year’s King’s Speech setting out government legislative priorities.
On accounting reform, however, there is no timetable for the move to require all companies, regardless of size, to file a balance sheet and profit and loss account. This will be a major change for small businesses, so it is likely that there will be a reasonable lead time before this in introduced as a mandatory requirement, possibly the end of 2026, or early 2027. However, the current Business Secretary, after lobbying following the recent announcement, is reviewing this part of the act.
Although no date yet has been given for all companies to file a profit and loss, the plan is that Companies House will be able to:
- Mandate software-only filing for all accounts, similar to making tax digital, and the requirement for tax using approved financial management software to enable quarterly returns to be filed.
- Remove the option for small companies and micro-businesses to file abridged accounts (short form accounts, with no profit and loss).
- Require all companies to file profit and loss accounts and require small companies to file a directors’ report.
- Require a company claiming an audit exemption to provide an enhanced statement from the directors on the balance sheet, in detail specifying the exemption being claimed and confirming the company is eligible for the exemption;
- Limit the number of times that a company can shorten its accounting reference period.
Timetable announced by Companies House:
By Summer 2025, Companies House should be able to:
- Receive and assess applications from individuals seeking to suppress their date of birth for documents registered before 10 March 2015, signature, business occupation, and residential address in most other instances.
- Allow access on request to certain trust information on the Register of Overseas Entities.
By Autumn 2025:
- Identity verification will be made a compulsory part of incorporation and new appointments for new directors and personal service companies (PSCs).
- Begin the 12-month transition phase to require more than seven million existing directors and PSCs to verify their identity - the identity verification will happen as part of the annual confirmation statement filing. To enable this, online accounts have to be set up, which Companies House is currently emailing company directors about the changes and the set up process.
By Spring 2026:
- Make identity verification of the presenters of company documents a compulsory part of filing any document.
- Require third party agents, filing on behalf of companies, to be registered as authorised corporate service provider (ACSP) including accountancy and law firms.
- Reject documents delivered by disqualified directors, as they will be prohibited from doing so, unless they are delivered by an ACSP for specified filings permitted by law.
By the end of 2026:
- Require all limited partnerships to submit more information, providing greater transparency for users of the register.
- Complete the transition period for all individuals on the register requiring identity verification and start compliance activity against those who have failed to verify their identity.
- Facilitate greater cross-checking of information and data between Companies House and other public and private sector bodies.
In addition:
- Clamp down on abuse of dormant company status.
- Directors of dormant companies will need to specify which exemption is being claimed and confirm that the company qualifies for the exemption.
This additional statement is intended to act as a deterrent to criminal activity and to provide additional enforcement evidence.
- From April 2027, Companies House will also curtail the number of times a company can change accounting reference periods to once in a five-year period. A company will have to provide a business reason if they want to shorten the period more than once within five years.
The changes are the most radical for many years, and it is likely, as happens with HMRC, that there will be a level of scrutiny into returns filed, and/or checking Companies House filings. We are already seeing a greater level of checking by Companies House, noting a set of company Articles being refused recently due to a miss-spelling between the special resolution and the actual Articles.
Client directors need to prepare for these changes, by making sure the current Companies House records are is up to date (you would be surprised how many are not), up to date director identification is held in readiness for the requirement to file, and setting up a Companies House portal.
In the meantime, If you would like to discuss the changes, please feel free to reach out.
