For every company director and business owner in the UK, significant changes are on the horizon. The Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) is set to introduce tougher rules and radical reforms to how companies operate and report, with key changes beginning to bite from autumn 2025 onwards. It’s crucial to be prepared, and at Max Pro Accountants, we’re here to help you navigate these developments.
Companies House has recently provided an updated implementation timetable for these upcoming rule changes. While parliamentary time remains a factor, the government is clearly committed to this anti-corruption programme, a cornerstone of last year’s King’s Speech.
Identity Verification: A New Era of Transparency
One of the most impactful changes involves compulsory identity verification. By autumn 2025, all new company directors and individuals involved in Personal Service Companies (PSCs) will be required to verify their identity as part of the incorporation or new appointment process. This will be followed by a 12-month transition phase, starting in autumn 2025, during which over seven million existing directors and PSCs will need to verify their identity – often as part of their annual confirmation statement filing.
Looking further ahead to spring 2026, identity verification will become a mandatory requirement for anyone filing any document with Companies House. This means that if you’re a director, or if your accountant or solicitor files on your behalf, everyone involved will need to be verified. In fact, by spring 2026, third-party agents, including accountancy and law firms, will need to be registered as an Authorised Corporate Service Provider (ACSP) to file documents. This will ensure an even greater layer of accountability and trust in the system.
Radical Accounting Reform on the Horizon
While the timetable for accounting reform is not yet set, the planned changes represent a radical overhaul of the current financial reporting framework. The intention is for all companies, regardless of size, to file a balance sheet and a profit and loss account. This will be a significant shift, especially for small and micro-businesses, who currently benefit from simplified filing options.
The key planned accounting reforms include:
- Mandatory software-only filing for all accounts: This will streamline the process and encourage digitisation.
- Removal of abridged accounts: Small companies and micro-businesses will no longer have the option to file abridged financial statements, meaning more detailed information will be publicly available.
- Compulsory profit and loss accounts: All companies will be required to file a profit and loss account, improving the financial transparency on the public register. Small companies will also need to file their directors’ reports.
- Enhanced audit exemption statements: Companies claiming an audit exemption will need to provide a more detailed statement from their directors on the balance sheet, confirming eligibility.
- Limits on shortening accounting reference periods: This aims to prevent misuse of the system.
- These comprehensive changes are designed to enhance the integrity of the UK’s corporate register, combat economic crime, and provide greater transparency. While the full impact will unfold over the next couple of years, the message is clear: compliance is tightening.
How We Can Help You
The upcoming ECCTA 2023 reforms will undoubtedly present new challenges for businesses of all sizes. Navigating these new requirements, from identity verification to detailed accounting filings, can be complex and time-consuming.
At Max Pro Accountants, we are fully up-to-date with these legislative changes and are here to ensure your business remains compliant and prepared. Don’t wait until these rules come into full effect. Contact us today to discuss how these changes might impact your business and how we can help you stay ahead of the curve. We can provide tailored advice and support to ensure a smooth transition into this new regulatory landscape.
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