The UK’s business landscape is set for a major shift, as the Economic Crime and Corporate Transparency Act (or Economic Crime Act) received royal assent on October 26, 2023. This powerful legislation empowers Companies House to play a leading role in combating economic crime and fostering a more robust, transparent business environment.
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Purhose of the Economic Crime Act
The Act marks a significant step forward in tackling economic crime, which costs the UK an estimated £37 billion annually. By equipping Companies House with increased powers, the Act aims to:
- Enhance transparency: The Act mandates stricter reporting requirements and verification processes, bringing greater accuracy and reliability to company information.
- Boost confidence: With improved transparency, investors and consumers can feel more confident about engaging with UK businesses, leading to a healthier and more vibrant market.
- Empower Companies House: The Act grants Companies House new tools to investigate suspicious activity, identify hidden beneficial owners, and hold companies accountable for failing to prevent economic crime.
New Responsibilities for All:
The Economic Crime Act brings with it new responsibilities for various stakeholders:
- Company directors: Both new and existing directors will face stricter due diligence checks and enhanced Know Your Customer (KYC) procedures.
- People with Significant Control (PSCs): Disclosure is no longer optional. PSCs must now reveal their identities and relationships with the companies they control.
- Anyone filing on behalf of a company: Accuracy and transparency become paramount. Double-check your documentation and ensure compliance with the Act’s requirements.
What This Means For You and Your Business
The Economic Crime Act has wide ranging implications accross your business:
Company Data and Registers:
- Improved data quality: Companies House gains stronger powers to query information, can enforce stricter company name checks, and regulate registered office addresses.
- New “lawful purpose” statements: Companies must clarify the purpose of accessing register information.
- Electronic filing of accounts: Transition to digital accounts filing begins.
- Mandatory ID checks: Anyone setting up, running, owning, or controlling a company needs to verify their identity.
- Enhanced due diligence: Companies House gains improved tools to investigate and challenge ID information.
Confirmation Statements and Fees:
- Streamlined confirmation statements: Replacing annual returns with simpler digital declarations.
- Revised company fees: New fee structure announced, including discounts for online filing.
- Data privacy safeguards: Improved measures to protect personal information on company registers.
- Controlled access to sensitive data: Enhanced security protocols for accessing certain information.
- Clarified regulations: More specific rules for limited partnerships and their members.
- Enhanced transparency: New requirements for disclosing beneficial ownership and control in limited partnerships.
Law Enforcement and Compliance:
- Stronger investigation powers: Companies House gains new tools to investigate potential wrongdoing.
- Data sharing with law enforcement: Improved collaboration between Companies House and law enforcement agencies.
- Failure to prevent economic crime: Companies can be held liable for not implementing adequate anti-money laundering and fraud prevention measures.
When is This Happenning?:
- Changes are implemented gradually over the next few years.
- Key dates and deadlines provided on the official website – here.
- We will keep our blog updated as dates are announced…or changed!
Preparing for the New Landscape:
Navigating these changes doesn’t have to be daunting. View the Act as an opportunity to build trust and confidence in your business. By embracing transparency, you can attract investors, partners, and customers.
Bude Accounting can help you prepare, or even just provide you with the confidence that you are ready. Contact us via email@example.com or phone 07950719470 or click here.