In March, Companies House introduced the first set of changes under the Economic Crime and Corporate Transparency Act.
These new and enhanced powers represent the biggest changes to Companies House since our inception and give us a legal framework to better deal with the modern day challenges of abuse of our corporate registers.
Since 1844, Companies House has served an almost purely administrative function. This shift in remit sees Companies House go from an organisation which passively accepts information in good faith, to one which actively scrutinises and, when necessary, challenges and removes the information provided to it.
We now have the tools we need to take a much harder line on those who seek to abuse our company register and use UK companies to pursue criminal activities. Over time, the measures we’re bringing in will lead to improved transparency and more accurate and trusted information on our registers.
The problem, and how we’re tackling it
We’ve seen a lot of evidence over the past 10-15 years that suggests UK companies have been used to help facilitate fraud, both in the UK and internationally. For a long time, Companies House has not had the legal power to analyse or challenge the information it receives or verify its accuracy. Over the past few years, there’s also been a spike in ‘address hijacking’ and identity fraud relating to company incorporation, where fake companies are registered to innocent citizens’ addresses, or in their names, without their knowledge.
With our new powers, we’re able to:
- Reject information that seems incorrect, or remove it from the register entirely
- Query and challenge any inconsistencies between new and existing information on the register
- We also have more powers to share information with law enforcement agencies and other government departments
With these new powers, we’ll be able to help victims of address fraud more quickly, and it will be easier to correct false information.
Setting up the new intelligence hub and sharing our data
We’ve created an intelligence hub, and we've invested in systems and people to develop our intelligence capability. We’ve implemented 200 new operational processes and examination policies, and hired staff for 18 new teams, 15 in our customer delivery directorate, and three in our intelligence directorate. We’re continuing to recruit over the coming months to ensure we have the resources we need to deliver these changes.
We’re also increasing our use of data science and digital research, to develop insights on patterns of activity and behaviour from information held on the register.
We’ve streamlined the process for key government departments and law enforcement agencies to share reports of suspicious activity with us – and we've made it easier and faster to share our intelligence and data with them – for the purpose of crime prevention and detection.
We were already doing some of this, but our new powers mean we can now be much more proactive. Our powers will enable us to play a more central role – supporting the UK’s drive to tackle economic crime and reduce criminality.
The road ahead
We’re in the process of delivering a large and complex set of changes, which require secondary legislation and system development to execute. These changes will be introduced in phases over the coming years. We’ll be implementing identity verification, so we can be sure the people setting up and managing companies are who they say they are, which will make our position in the fight against economic crime even stronger.
This is a huge opportunity for us. We have an important role to play in tackling economic crime, but we must also deliver brilliant services to our customers and support the business environment here in the UK.
Our job is to make it easy for people to do business and register their information with Companies House, but we’ve known for some time that UK companies have been misused by criminals to commit fraud, money laundering and other forms of economic crime.
We’ll now work more proactively, taking unprecedented steps to crack down on fraudulent activities and preventing further abuse of the register.