Source · Select Committees · Public Accounts Committee
Recommendation 4
4
Accepted
Companies House reforms contain gaps, enabling continued fraudulent company registration.
Conclusion
The planned reforms to the role of Companies House leave huge gaps and it is still too easy to register companies fraudulently. The Economic Crime and Corporate Transparency Act 2023 introduces significant changes to the role of Companies House, including new powers to remove inaccurate information from the company register and share data with other government bodies. Prior to the Act, Companies House had limited powers to check the validity of information provided to it, meaning it was easy for fraudsters to set up legitimate UK companies for illegitimate means. Companies House’s data show that company incorporations in the UK between 2021 and 2022 greatly exceed those in other countries. Companies House is using its new powers to clean up the register, having removed 50,000 registered office addresses from the register so far. However, Companies House says the reforms will not be fully operational until March
Government Response Summary
The government agrees and highlights actions already taken since March 2024, including removing over 73,400 inappropriate addresses and rejecting 7,000 new incorporations. It commits to continuing the rollout of ECCTA reforms, including identity verification, and will report on progress to the Committee in November 2025.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. integrity of company address information on the register. Already, since 4 March 2024, when the first phase of powers under the Economic Crime and Corporate Transparency Act 2023 (ECCTA) was introduced, Companies House has prioritised tackling companies with inappropriate addresses. Over 73,400 addresses have been removed and, as a result, strike off has been initiated for up to 5,000 companies per week. Through increased capabilities in data analysis, Companies House continues to work to prevent the registration of misleading information at source. For example, 7,000 new incorporations have been rejected including where evidence has suggested addresses are inappropriate. The Department for Business and Trade (DBT) and Companies House will continue to work together in rolling out the remaining ECCTA reforms, which will help to tackle economic crime and fraud. This will include the upcoming introduction of identity verification requirements. The potential benefit of additional legislative measures will remain under review as ECCTA reforms become embedded and their impact is evaluated. Any further changes would need to be balanced against a range of factors including burdens on business, administrative impacts and other legislative priorities. DBT and Companies House are already considering options and will report to the Committee on progress in November 2025.