If you are a business owner, you may have heard about the recent and important changes to accounts preparation and filing requirements with the Economic Crime and Corporate Transparency Act passing into law on the 26th of October 2023 ...
In addition, micro-entities will also be required to file their profit and loss accounts, but they will still have the option not to prepare or file a directors' report. This is a significant change as micro-entities were previously exempt from filing any financial information.
Another important change introduced by the Act is the provision that profit and loss accounts may not be publicly available. This means that while small and micro companies will be required to file their profit and loss accounts, they may not necessarily be made available for public inspection. This regulatory power gives Companies House the ability to protect sensitive financial information and prevent it from being misused by fraudsters.
Furthermore, the Act also includes a new requirement for companies claiming audit exemption. Directors will now have to include a statement on the balance sheet stating the exemption being taken and confirming the company's eligibility for it. This change is aimed at ensuring that companies claiming audit exemption are doing so legitimately and have met the necessary criteria.
This includes the authority to require documents to be delivered by electronic means, paving the way for a transition to software-only filing. This will not only make the filing process more efficient and cost-effective for businesses, but it will also make it easier for Companies House to monitor and identify potential cases of economic crime.
And finally, the Act introduces measures to improve the accuracy and reliability of information on the company register. This includes giving Companies House the power to verify information provided by companies and impose penalties for providing false or misleading information. This will help prevent the misuse of the corporate framework for illegal activities such as money laundering and tax evasion.
The changes introduced by the Economic Crime and Corporate Transparency Act will be implemented gradually over the next few years. While some measures, such as the simplification of filing obligations, will come into effect immediately, others will require secondary legislation to be introduced. This includes the introduction of electronic filing and the verification of information provided by companies!
The Economic Crime and Corporate Transparency Act is a significant step towards improving transparency and tackling economic crime in the UK. By strengthening the UK's company register and giving Companies House more powers to monitor and verify information, the Act aims to promote a fair and transparent business environment.
It is important to stay updated on these changes and remain compliant to avoid any penalties or legal issues in the future.
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