As part of the government’s aims to increase corporate transparency and reduce the use of UK companies for criminal purposes, the Department for Business, Energy and Industrial Strategy has put forward new legislation (Part Two of the Economic and Corporate transparency Bill).

This proposes measures to reform Companies House and give the Registrar of Companies additional powers to maintain the accuracy of the UK’s record of companies.

In this month’s Finance Matters, Partner Jamie Lane summarises some of the proposals which will affect the way businesses prepare and file their accounts in future.

We also meet and get to know Manager Matt Trowbridge who applied to be on Junior Apprentice!

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Part Two of the Economic and Corporate transparency Bill

By Jamie Lane

Filing obligations

The Bill aims to simplify and streamline the filing obligations for small companies and micro-entities by separating the legal requirements into two distinct sections. The amendments also seek to ensure that key information is retained on the public register, where it would previously have been unavailable to the public.

Small companies

Small companies will no longer have the option to prepare and file abridged or fileted accounts. This means that they would be required to file accounts that include a profit and loss account and directors’ report. Previously this information would have been prepared by the company but would not be filed, therefore unavailable to the public. Where a company is seeking an exemption from the requirement to have accounts audited (for example because it is categorised as a ‘small company’) directors would be required to make a statement confirming that the company qualifies for an exemption (see below).

Micro entities

Micro entities will also be required to file their profit and loss account but will continue to have the option not to prepare or file a directors’ report. As with small companies, this information would have been previously prepared by the company but would not be filed, therefore unavailable to the public.

Exemption from audit

The new rules would also require directors to identify the exemption from audit being taken and to confirm that the company qualifies to take it. The aim of the proposed legislation is to reduce the risk that entities are falsely claiming an exemption from audit that they may not be entitled to.

Companies House reform – next steps

The Bill will also introduce new objectives for Companies House to promote and maintain the integrity of the register and give the registrar additional powers to support these objectives. This will include the power to reject and query new filings, as well as to query information already on the register to verify the integrity. In addition, the registrar will have greater powers to remove information from the registry and the ability to reject documents that contain inconsistencies or appear incomplete. Documents that have been rejected will be considered not to have been delivered. In addition, the registrar will be given the ability to mandate a method of delivery for documents. This could lead to the requirement in the future for accounts to be submitted electronically using an IXBRL format.

It is anticipated that this Bill will be enacted by Spring 2023 and so we suggest all entities review these changes to see if they will be affected. Please note that the matters highlighted above do not constitute an exhaustive list and the legislation is still subject to amendment during the Parliamentary process.

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Getting to know our team

Name: Matt Trowbridge

Role: Manager

Time at Saffery: Three years

What’s the best bit about your job?

The people that I get the privilege to work with. At Saffery we have really great staff and a fantastic client base which makes my job extremely enjoyable. A firm is only as good as the people you work with and I am fortunate to work alongside such amazing people.

The culture of Saffery Champness is really important to the business and the people within it. What do you think you bring to the team and what do you contribute?

I am someone who has lots of natural energy and enthusiasm and I think that I am able to pass that on to those around me. I am also a firm believer in knowledge sharing and therefore I always like to take the time to mentor and help others wherever I can.

 If you weren’t doing this role, what might you be doing?

I used to work in the kitchen of a care home when I was younger and I enjoy cooking/preparing food so I could see myself working in a kitchen if I wasn’t an accountant.

What do you enjoy doing outside of work?

I enjoy keeping active. Whether that is going to the gym or running I am always on the go. I completed a running challenge of 100km in November (which I started late on November 9) and I also plan on entering a few races this year.

I also enjoy going for country walks at the weekend which usually end up with a nice trip to a country pub.

Tell us something about yourself that we don’t know

As a teenager, I applied to be on Junior Apprentice and secured an interview to be on the BBC TV show but sadly did not make the cut at the final stages.

Who or what inspires you?

I am someone who has always been quite competitive and me and my sister have always pushed each other in all aspects of life. She made the big move to London following her degree at Bournemouth University which I always thought was a courageous move. She has made a huge success of herself in an industry that has traditionally been male dominated (IT). All of her success has been her own doing and through her hard work which is hugely inspirational.

What’s your favourite place in Dorset?

My hometown of Shaftesbury will always be my favourite place in Dorset. I am just about to move from Shaftesbury to live closer to Bournemouth and I am going to miss it greatly. There are some great country walks with stunning views, great pubs and amazing local businesses. The town really has a great community spirit with events happening all throughout the year.

Give three words to describe yourself

Enthusiastic, caring, humorous.