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An enhanced role for Companies House in law enforcement

Author: ICAEW Insights

Published: 15 Mar 2021

UK Companies House reform will result in challenging the information that is delivered to it which will, in turn, enhance its role in relation to law enforcement.

 “We’re moving in a direction whereby there will be more challenging, more querying, and more analysis of the information that's given to us,” says Louise Smyth, CEO, Companies House. “We are looking at what that means for our workforce.”

She confirms that addressing concerns around financial crime is a key driver behind the reforms “There is an enhanced role that we can play in helping law enforcement to identify when people are using the company vehicle for nefarious means, such as money laundering, people trafficking, all sorts of things. Our role will not be limited to helping law enforcement with just financial crime,” she says. “There will be so much more that we can do with new powers.”

Two consultations (now closed) seek to enhance Companies House’s role in helping the Government tackle economic crime. The first sought the views on new powers for Companies House to query, remove and amend information on the public register (Corporate transparency and register reform: powers of the registrar). The second sought views on a new set of principles to limit corporate director appointments (Corporate transparency and register reform: implementing the ban on corporate directors).

There is a third consultation (also closed) that sought views on how to improve the quality and value of financial information available on the UK companies register generally (Corporate transparency and register reform: improving the quality and value of financial information on the UK companies register). 

Information collected by Companies House, under the reforms, will not only be more robust, but it will also serve all its audiences better – suppliers, customers, government, other business associates, and law enforcement. “Our approach is to get as much information out there as soon as possible. We make sure that users get real-time access to data too. And we’re really proud of that because we were the first in government to do this through our streaming API. And we're extending the amount of information that's available, as well as extending and improving our search services, so users can cut that information in different ways themselves,” she says.

“One of the other things we're looking at is unlocking data buried in images. A lot of data is stored in these images, and obviously that's really difficult for people to access.” Being able to open up access to this data will be especially useful in the fight against crime – economic or otherwise.

A consistent data strategy across government is also vital, she says. “We’re working with HMRC on this but also across the whole UK corporate reporting world. In particular, the organisations that are very interested in this are the FCA, FRC, HMRC, and the Charities Commission, amongst others. Compatibility – even down to tagging – is important if we are to have consistency,” she says.

Ultimately, says Louise, improved information for all sorts of purposes will come with the verification of individuals. “If we're going to be verifying individuals, then we need different systems in place, and doing that is a big deal. Lots of people have been trying to do this with varying degrees of success,” she says, but the reforms for Companies House that are now being proposed will enable it to look at individuals in relation to the different companies they run. “This is where Companies House can make a real difference to law enforcement.”

She refers to the recent scandals involving companies exploiting the COVID government support schemes, selling fake PPE, and so on. “If we hold the right, accurate, information, and are given the right powers, we might be able to stop these sorts of things happening, or at least be able to follow up,” she says.