Companies House sets dates for major rule changes

Sara White, Editor, Business & Accountancy Daily

Tougher rules for company directors under ECCTA 2023 will start to bite from autumn 2025 onwards with radical accounts reform also planned for 1 April 2027.

Companies House has confirmed the current intended implementation timetable for upcoming rules changes, including the ability to request the suppression of day 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.

‘The timelines are dependent on suitable parliamentary time in both houses and will be kept under review,’ Companies House stressed. It is understood the government is committed to the anti-corruption programme and these measures were part of last year’s King’s Speech setting out government legislative priorities.

On accounting reform, however, there is as yet 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 in the Economic Crime and Corporate Transparency Act 2023.

However, these accounting reforms will be a radical overhaul of the current financial reporting and accounting framework for all businesses, with small and micros most affected, and software only filing for accounts.

Although there is no timetable for rollout, the plan is that Companies House will be able to:

1. mandate software-only filing for all accounts – package accounts will be able to use the new zip package functionality;

2. remove the option for small companies and micro-businesses to file abridged accounts;

3. require all companies to file profit and loss accounts, helping to improve the financial information on the register – and require small companies to also file their directors’ report;

4. require a company claiming an audit exemption to provide an enhanced statement from their directors on the balance sheet, specifying the exemption being claimed and confirming the company is eligible for it; and

5. limit the number of times that a company can shorten its accounting reference period.

   
   

In terms of the wider changes to Companies House rules on non-financial reporting, the next 18 months will see a radical overhaul of the current regime with the latest timetable set out in a six-monthly report on ECCTA implementation progress.

By summer 2025, Companies House should be able to:

• receive and assess applications from individuals seeking to suppress their day 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.

By spring 2026:

• make identity verification of the presenters a compulsory part of filing any document.

• require third party agents filing on behalf of companies to be registered as an 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.