Research has shown that our financial information is the most valuable data set that we hold. The information is used by:
- financial institutions
- civil society groups
- the public at large
It supports investment, enables business transactions and helps to hold directors to account.
Accuracy of information is therefore vital.
However, the registrar does not currently have the power to query the information we receive before placing it on the register. Incorrect information is a common cause of complaint.
Another government consultation is seeking to address this issue by strengthening the powers of the registrar. This includes giving a discretionary power to query and check information before it’s placed on the register.
While the vast majority of companies file correctly, we see cases of false information being filed - often by accident but sometimes deliberately. For example, we know some companies file micro-entity accounts when they are not eligible, and law enforcement bodies have highlighted that this practice is commonly used in money laundering cases as a way to hide information.
We want the register to inspire trust and confidence. By improving the quality and integrity of the financial information on the register, we can really make a difference and help drive confidence in the UK economy.
The corporate transparency and register reform consultation, published in 2019, sowed the seeds for significant reform to the role of Companies House to improve business transactions and tackle economic crime.
In this consultation we asked how the financial information on the register could be improved. Respondents challenged us to be more bold and ambitious in our proposals and suggested a wide range of improvements that could be made to improve the quality, timeliness and value of the financial information.
The package of proposals in this consultation largely reflect those suggestions and take account of evidence that we've gathered through our work and engagement with other government departments and agencies.
Balancing the need to tackle fraud and improve quality against the need to not add burdens on companies, is challenging - especially in these difficult times. We've been talking to stakeholders throughout the development of the proposals and this consultation gives wider audiences the opportunity to give their views.
Improving the quality and value of financial information on the UK companies register consultation
The consultation is split into 3 parts:
Part A – How accounts are delivered to Companies House
The first part of the consultation focuses on how accounts are delivered to Companies House and includes proposals to:
- progress towards filing once with government
- require accounts to be delivered digitally and to be fully tagged using iXBRL
- reduce timescales for accounts to be filed
Part B – What information should be filed at Companies House
This part of the consultation outlines the information that is currently required by Companies House and asks whether further information might improve the value of the register. It includes proposals to:
- require company directors to confirm the company’s eligibility to file the specific type of accounts being used
- review small company accounts filing options
Part C – What Companies House does with this information
The final part of the consultation explores what Companies House should do with information it receives in accounts. It sets out proposals to:
- increase the checking of accounts
- improve the way financial information is displayed on the register
The proposals will give Companies House a more effective role in assisting the government’s wider efforts to tackle economic crime - by improving the quality of the financial information available about companies and other business entities and ensuring that it’s up to date.
The consultation closes on 3 February and we look forward to hearing your view.