Companies House reforms could cut filing deadlines
25 January 2021: The proposed reform of Companies House powers is inching forward, which could see the introduction of mandatory digital filing, a reduction in the number of filing options available to the smallest companies and filing deadlines shortened to as little as three months.
Building on measures announced in September 2020, BEIS launched three further public consultations exploring the role and power of Companies House in December.
ICAEW has engaged with BEIS throughout this process and is a member of its working group, providing input on its initiative to transform Companies House. We will be responding to BEIS’s consultations, with input from expert committees and other groups.
One of the main objectives behind the reforms is to improve the quality and value of the financial information submitted to Companies House. The agency has seen “significant engagement” with company financial data since it opened up access online and see it as a major asset for the UK economy. In 2019, register data was accessed 9.4 billion times (according to government figures) and its research suggests this data is currently worth up to £3bn per year to users.
The significant changes up for consideration include mandatory digital filing and a requirement to tag accounts digitally using iXBRL. Filing deadlines could also be potentially shortened to three months for public and six months for private companies to give a more current picture of company performance, with potential knock-on benefits for the UK economy.
Views are also being sought on requiring companies to file the most detailed set of accounts prepared for members and reducing the number of filing options available to those under the small and micro entities regimes.
Improving the quality of information held on the Companies House register could also make it easier for the UK’s smallest companies to access all-important funding. Responses to the initial consultation on Corporate Transparency and Register Reform suggested that the limited information currently supplied in micro-entity accounts to Companies House was potentially deterring lenders from agreeing finance.
The government is exploring whether digital capabilities could make filing more efficient and access to the data on the register easier, including the potential for filing financial information once with government. In this context, the government believes the value of the data could be enhanced if it were timelier, more accurate, digitally ‘tagged’, and potentially for many entities, more detailed.
At the same time, BEIS is consulting on whether the powers of Companies House should be extended, allowing it to conduct additional checks on account filings before they are accepted onto the register and giving it greater authority to scrutinize and reject them. Beefing up Companies House powers would help to address growing concerns about how the limited information provided by micro-entity accounts is being used by criminals to conduct economic crime.
Meanwhile, BEIS is also seeking feedback on the proposed ban on corporate directors that would require all company directors to be individuals. Under current rules, only one director on a company’s board must be an individual and any number may be corporate directors, ie other companies or legal entities.
The general deadline for feedback on the consultations is 3 February.
Links to the relevant BEIS consultations: