Recommendation 3

HMRC, Companies House and the Insolvency Service have failed to work collaboratively, missing opportunities to increase the tax take. Due to the fraudulent use of UK company registrations, contrived insolvencies and phoenixism to evade tax, HMRC, Companies House and the Insolvency Service must work closely to tackle these threats together. The introduction of ECCTA presents opportunities for all three organisations to work more closely. At Autumn Budget 2024 the government announced it would increase collaboration between HMRC, Companies House and the Insolvency Service to tackle phoenixism. The organisations say they will be developing a joint plan for closer working over the next financial year. Companies House and HMRC are discussing closer integration of systems to tighten registration requirements, including a joint registration service, but they estimate this will take between five to ten years to implement. This is too long whilst major gaps remain in checks for both company and VAT registrations. Whilst it is encouraging that all three organisations are 4 committed to joint working and agree there are significant benefits to be had, we are disappointed that it is taking so long for this to happen. Delays in implementation decrease the additional revenue available. recommendation HMRC, Companies House and the Insolvency Service should develop a plan for more effective joint working and write to the Committee within six months with further details. This should include: a. clear roles and responsibilities for tackling fraudulent registrations, corporate abuse and contrived insolvencies; b. clear objectives on tackling these threats; c. an assessment of how local and shared controls can be strengthened between them and operated most cost–effectively; and d. a more ambitious timeframe for introducing a joint registration process, given there is significant benefit to this.