New measures introduced in the Economic Crime and Corporate Transparency Act 2023 and supplementary regulations give Companies House greater powers to tackle breaches of company law. This includes the power to impose non-compliance penalties on companies and duty holders (e.g. directors) who commit relevant offences under the Companies Act 2006.
Companies House, the UK registrar of companies, is responsible for maintaining the public register of companies in England and Wales, Scotland, and Northern Ireland.
To improve the quality of this register, the Economic Crime and Corporate Transparency Act 2023 requires Companies House to promote the following objectives:
Companies House uses various methods to promote these objectives and help businesses comply with their statutory obligations, including providing advice and published guidance.
Where non-compliance or breaches of the law occur, the registrar has the power to use the following enforcement methods in line with its new enforcement policy :
To support these new powers, Companies House has developed a compliance framework for assessing levels of compliance and deciding how to respond to perceived breaches. The levels are as follows:
The company or duty holder:
In this situation, no non-compliance penalties will apply. Companies House will consider monitoring activity and intelligence, in addition to sending automated email reminders when filing deadlines are approaching.
In this situation, Companies House will consider (in addition to level 1 actions):
In this situation, Companies House will consider (in addition to levels 1 and 2 actions):
In this situation, Companies House will consider (in addition to level 3 actions):
At this level of non-compliance, Companies House will consider imposing any and all sanctions against the company and the people responsible for running it.
Under the Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024 , Companies House has the power to impose financial non-compliance penalties on any person (a company or individual) whose conduct amounts to a relevant offence under section 1132A of the Companies Act 2006 .
Depending on the particular offence, the penalty may be one of the following:
Where a relevant offence is suspected, the registrar may issue a written warning notice to that person. They will have 28 days (beginning the day after the date on the warning notice) to either:
If the person takes the required action to rectify the non-compliance issue within the 28-day period, they won’t receive a penalty.
However, where no action is taken and/or Companies House is satisfied that the person has committed a relevant offence, a written penalty notice may be issued. This will outline the following:
If the penalty is not paid within 28 days of the penalty notice date, Companies House may try to recover payment through a debt collection agency or the court.
Companies House calculates non-compliance financial penalties based on the severity of the relevant offence and how many times the person has committed offences of the same (or similar) kind in the last five years.
These financial penalties are an alternative to prosecution. As such, they are similar to the fines that a court may impose.
Based on the standard scale of fines for summary offences , Companies House considers:
The financial penalty amounts for these offences are as follows:
You can avoid non-compliance penalties by staying up to date with changes to UK company law and completing all filing and reporting responsibilities for Companies House. These include:
Companies must keep accurate and up-to-date statutory registers , including a register of members. You must make these records available for public inspection at your company’s registered office address or SAIL address.
Companies must prepare an annual confirmation statement at least once a year. This filing confirms that the company information on the public register is correct and up to date.
All companies, including dormant companies , must prepare and deliver annual accounts to the registrar each year. The filing deadline is 21 months after incorporation (first accounts), then 9 months after the company’s accounting reference date (ARD) for all subsequent accounts.
You must notify Companies House if there are any changes to your company, including the following:
You can report these changes using the Companies House online service or by post. Alternatively, you can use the Rapid Formations Online Client Portal .
Companies House provides various resources to help individuals and organisations stay compliant. These include:
At Rapid Formations, we also provide a Hassle-Free Compliance Service to assist directors with their statutory filing and reporting requirements for Companies House. This all-inclusive service is available to existing clients and new customers for only £149.99 per year.
Please comment below if you have any questions about this topic. For more limited company guidance and small business advice, explore the Rapid Formations Blog.