The New Fee Structure

The fee hikes are substantial, with some services seeing a four-fold increase in cost. Here’s a detailed breakdown of the new fees:

• Incorporating a company online: £50 (previously £12)
• Incorporating a company via paper filing: £71 (previously £40)
• Filing a confirmation statement online/via software: £34 (previously £13)
• Filing a confirmation statement via paper: £62 (previously £40)
• Changing a company name online/via software: £20 (previously £8)
• Changing a company name via paper filing: £30 (previously £10)

These increases are significant and will undoubtedly impact businesses, especially small and medium-sized enterprises (SMEs) operating on tight budgets.

The Rationale Behind the Hikes

Companies House has cited the need to fund its ongoing operations and activities related to the Economic Crime and Corporate Transparency Act 2023 as the primary reason for the fee increases. The Act introduces reforms to prevent the misuse of limited partnerships and enhances Companies House’s role in tackling economic crime and improving corporate transparency.

Additionally, Companies House aims to streamline its processes and promote greater transparency by requiring all businesses to file their profit and loss statements alongside their balance sheets. This move towards digitalization and increased disclosure is expected to improve the accuracy and trustworthiness of the information held on the Companies House register.

Implications for Businesses

The fee hikes will undoubtedly add to the financial burden faced by businesses, particularly those operating on tight margins. However, it’s essential to recognize the broader implications of these changes.

Increased Compliance Costs

Businesses will need to factor in the higher fees when budgeting for incorporation, annual filings, and other statutory requirements, potentially impacting their bottom line. For instance, the cost of incorporating a company online has more than quadrupled, from £12 to £50, while paper filings have nearly doubled from £40 to £71.

Transparency and Accountability

The push for greater transparency and accountability in corporate reporting aligns with global trends towards better governance and anti-corruption measures. While this may initially increase administrative burdens, it could ultimately foster a more trustworthy business environment. The requirement for all businesses to file profit and loss statements alongside their balance sheets is a significant step towards this goal.

Digital Transformation

The move towards digitalisation and the phasing out of paper filings is in line with the broader trend of embracing technology and streamlining processes. Businesses that adapt to these changes early may gain a competitive advantage in the long run. For example, the cost of filing a confirmation statement online is now £34, compared to £62 for paper filings, incentivizing digital submissions.

Preparing for the Changes

As businesses brace for the impending fee hikes, it’s essential to plan and take proactive measures:

Review and Adjust Budgets

Evaluate your current budgets and adjust them to accommodate the increased filing fees, ensuring you have sufficient funds allocated for statutory compliance. This is particularly important for SMEs and start-ups, which may find the increased costs more challenging to absorb.

Explore Digital Solutions

Investigate digital filing solutions and accounting software that can streamline your reporting processes and potentially reduce costs in the long run. Digital solutions not only help in compliance but also offer cost savings, as seen in the lower fees for digital filings compared to paper submissions.

Stay Informed

Keep abreast of any further updates or clarifications from Companies House regarding the fee changes and new reporting requirements. Regularly check the Companies House website and subscribe to their newsletters for the latest information1.

Seek Professional Advice

If needed, consult with accountants, legal professionals, or industry experts to ensure you fully understand the implications of the changes and take appropriate measures to remain compliant. Professional advice can help navigate the complexities of the new requirements and optimize your compliance strategy.

Broader Context: The Economic Crime and Corporate Transparency Act 2023

The fee increases are part of a broader legislative effort to enhance corporate transparency and combat economic crime. The Economic Crime and Corporate Transparency Act 2023 introduces several key reforms:

Identity Verification

All new and existing directors, persons with significant control (PSCs), and relevant officers of registrable relevant legal entities (RLEs) are required to verify their identities. This measure aims to prevent fraudulent activities and ensure that only verified individuals can incorporate and manage companies.

 Enhanced Reporting Requirements

Companies are now required to file more detailed financial information, including profit and loss statements, alongside their balance sheets. This increased level of disclosure is intended to improve the accuracy and reliability of the information held on the Companies House register.

Digital Submissions

All accounts must be digitally submitted to Companies House, tagged using standard labels for reporting. This move towards digitalization is expected to streamline the filing process and enhance the quality of data available to the public.

 Abolition of Certain Statutory Registers

The Act abolishes the requirement for companies to maintain various internal registers, including the register of directors, register of directors’ residential addresses, register of secretaries, and PSC register. Companies are still required to maintain a register of members.

Conclusion

The recent fee hikes by Companies House, effective from May 1, 2024, represent a significant change for businesses in the UK. While the increased costs may pose challenges, particularly for SMEs, they are part of a broader effort to enhance corporate transparency and combat economic crime. By staying informed, adjusting budgets, exploring digital solutions, and seeking professional advice, businesses can navigate these changes and position themselves for long-term success in an increasingly regulated and technologically driven landscape.

The fee increases, coupled with the new requirements under the Economic Crime and Corporate Transparency Act 2023, underscore the importance of transparency, accountability, and digital transformation in today’s business environment. Embracing these changes can ultimately lead to a more trustworthy and efficient business ecosystem, benefiting both businesses and the broader economy.