The Department for Business, Energy and Industrial Strategy’s (BEIS) reforms to Companies House filing requirements (first announced in September 2020) continues to move forward.
Since the changes influence compliance for all private companies in the UK, the ICAEW have represented the business valuation profession as a member of the BEIS working group. ICAEW offered input at three public consultations exploring the role and power of Companies House in December. ICAEW have also contributed input from their expert committees and other groups.
The proposed reforms of Companies House requirements include the introduction of mandatory digital filing (with iXBRL tagging), a reduction in the number of filing options available to the smallest companies, and filing deadlines shortened to as little as three months for public companies (the six-month requirement for private companies would remain).
BEIS say that one of their main objectives behind the reforms is to improve the quality and value of the financial information submitted to Companies House. Their current registry is heavily used, but the quality of reporting is mixed, particularly for micro and small organizations.
One of the most complicated reforms suggests that all companies ‘file the most detailed set of accounts prepared for members.’ This would be a huge benefit for business valuation professionals if Companies House could be relied on for more complete disclosure of operational results—but obviously there are costs and disclosure concerns from the business owner community. ICAEW counter those concerns by stating that ‘[i]mproving the quality of information held on the Companies House register could also make it easier for the UK’s smallest companies to access all-important funding.’
BEIS is consulting on whether the powers of Companies House should be extended, allowing it to conduct additional checks on account filings before they are accepted onto the register and giving it greater authority to scrutinise and reject them. Many feel Companies House powers should be increased to reduce perceived fraud and financial crime.
The general deadline for feedback is tomorrow (3 February), though the discussion continues.
ICAEW offer these links to BEIS consultations derived from the previous consultations:
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