The Economic Crime and Corporate Transparency Act (ECCTA) is set to bring about several changes in 2024, impacting the landscape of company laws in the UK. These changes span from improving data storage to updated fees for companies' house registration. In this article, we will take a closer look at some of the key legal developments and corporate law updates that will come into effect from 4 March 2024.
Enhanced Data Storage Requirements
One of the major changes that the ECCTA will introduce is enhanced data storage requirements for companies. The most important parts that;
- You`ve got to have a registered office address from 4 March,
- You need to confirm with Companies House that you are incorporating your business for a lawful purpose which will also reflect on your future confirmation statement.
- Under the new identity Verification Process, changes will also be made to the beneficial ownership register. HMRC will check more regularly on the likelihood of your company name being misleading. In other words, your business name has to have organic links with what you do. You can get more information other words here
- Your response to the formal requests from Companies House will monitored closely.
These data storage requirements are aimed at increasing transparency and reducing the risk of economic crime. As a result, companies will have to ensure that their registered office address is valid and up-to-date from 4 March 2024. Additionally, businesses will also have to confirm with Companies House that they are incorporating for a lawful purpose, which will be reflected in their future confirmation statement
Verifying Your Identity
- All directors and persons with significant control (PSC) need to go through ID verification for new businesses.
- For existing companies, if any of your PSC fails the identity verification check, you`ll have to remove them from the list of PSCs before 4 March 2024.
- You will need to have an authorised person such as a solicitor or accountant for this process.
The ID verification process is a new measure that aims at reducing the risk of economic crime and ensuring the accuracy of the beneficial ownership register. All directors and persons with significant control (PSCs) will be required to go through this process for new businesses while existing companies will have to remove any PSCs that fail the verification check. This process must be carried out by an authorised person, such as a solicitor or accountant.
Changes in Accounts
- A complete transition to filing annual accounts for companies will come into place after 4 March. You will need to file your company accounts and tax returns on software. In other words, no more paper filing options.
Digitising tax filing has been in consideration for years based on Making Tax Digital for VAT and corporation tax. The ECCTA is now extending the same to company accounts.
- Small and Micro entities need to file their loss and profits accounts in iXBRL.
These changes are aimed at simplifying the process of filing annual accounts and improving data accuracy. All companies will be required to file their accounts and tax returns using software, eliminating the option for paper filing. This move towards digitisation aligns with the implementation of Making Tax Digital (MTD) for VAT and corporation tax. Moreover, small and micro
Updated Companies House Fees
Finally, the ECCTA will also bring about changes in the fees for companies' house registration. These changes are yet to be announced, but it is expected that there will be an increase in some of the fees. This could include a higher fee for filing annual accounts and confirmation statements, as well as a penalty for late filing. Therefore, it is essential for companies to keep updated with these changes and plan accordingly to avoid any financial burden.
Changes in Your Future Confirmation Statements
From 4 March 2024, all companies will also have to confirm with Companies House that they are incorporating for a lawful purpose in their future confirmation statements. This means that businesses will have to provide evidence of their activities and intentions when submitting these statements. This is yet another measure aimed at increasing transparency and preventing economic crime.
Under the new changes, you`ll have to have a registered email address by which you will communicate with Companies House.
Whilst you are here, if you need to file your confirmation statement we`d be delighted to help.
What About Limited Partnerships?
Like the rest of the series of changes, in a limited partnership, "transparency" is the keyword. Limited Partnership Agreements are set to be more accessible and transparent. From 4 March, on Limited Partnership Agreements you`ll need to provide;
- Transparency of the Limited Partnership`s financials
- The requirement to file details of the Partners' "Person with Significant Control" (PSC)
- SIC Code
- Registered Office Address
- Confirmation Statement Filing
- Partners' full IDs in detail
You need to file your information through authorised agents, so agent authorisation code will become necessities.
How Can Debitam Help You?
At Debitam, we are well-equipped to assist you with these upcoming changes in company laws.
The basis of these changes channels up to two main purposes: Transparency and Technological efficiency. Even before the talk of any of the said changes we`d been strong advocates of online tax returns, digital tax filing, data protection and transparency in corporate operations. Our foundations are strongly aligned with what`s coming by March 2024 we are almost built for the new ear in Company Laws in 2024.
So, if you're looking for a trusted partner to guide you through these legal developments and help you comply with the changing corporate laws, Debitam has got your back.
We offer a range of services, including confirmation statement filing and secretarial services, to ensure that your company is well-equipped to meet the requirements set by ECCTA. Don't hesitate to contact us.
