Companies House indicates the introduction of reforms to increase transparency.
One of the most significant economic strengths of the UK has been its openness to investment from all parts of the world. However, the nature and type of financing are critical aspects that the UK Government has tried to regulate for quite a few years now.
Under the veneer of legitimacy provided by UK-registered companies and partnerships, many instances of misuse and laundering have been reported. The lack of accurate, transparent data combined with lax gatekeeping proved unfavorable for the UK’s Companies House, still functioning with limited powers to control the situation.
UK’s Companies House – Department of Business Latest Reforms:
To tackle this problem, UK’s Department for Business, Energy & Industrial Strategy has implemented two significant measures to increase corporate transparency about company ownership.
1. Publishing a white paper on corporate transparency and register reform
In this white paper, a comprehensive package of reforms to the Companies House will be outlined. This white paper is expected to become the basis for how UKs business registrar functions. As the reforms get implemented, the registrar will likely transform into a custodian of accurate and detailed information.
One of the critical reforms mentioned is the requirement for company accounts to be filed with Companies House in a digital format using the industry standard Inline Extensible Business Reporting Language (iXBRL). Completely tagged according to internationally accredited taxonomy, a company’s accounts are machine-readable, making the information easier to analyze, evaluate, compare and validate.
The regulation regarding financial reporting in the Inline XBRL (or iXBRL) format has been mandatory at HMRC since 2016. It has already been noted that machine-readable Tax documents benefit the millions of businesses, investors, and other users who use them to file documents for regulatory compliance.
Adopting iXBRL for Companies House submissions will also create a more informative, responsive, and reliable companies register, thus streamlining the economy and closing unwarranted gaps.
The white paper also contains requirements on identity verification for anyone setting up, running, owning, or controlling a company and enhanced data sharing between agencies.
2. Introduction of legislation to Parliament
The UK government has also introduced the Economic Crime (Transparency and Enforcement) Bill 2022. It includes creating a Register of Overseas Entities owning property in the UK and an overhaul of the Unexplained Wealth Order regime to make it easier for law enforcement to investigate misuse of funds.
How can DataTracks help?
At DataTracks, we have been helping firms across the UK file their returns in compliance with the iXBRL mandate by the HMRC.
One among the first suppliers of iXBRL Managed Tagging services recognized by HMRC, DataTracks has helped file more than 220,000 compliance reports since 2010, making us the lingua franca in compliance reporting.
Our depth of expertise lies in the breadth of services we offer to companies in the UK:
- iXBRL tagging for CT600 Filing
- MTD for VAT
- Country-by-Country Reporting
Connect with a compliance reporting expert for more information on why DataTracks is the best partner to help you with your regulatory reporting needs.
DataTracks is a global compliance reporting software service company with over 17 years of experience assisting over 21,500 enterprises globally. It is recognized by HMRC and is compliant with ISAE 3402, SSAE 18, and ISO 27001 standards.