As of this week, the government have passed The Economic Crime and Corporate Transparency Act 2023.

This bill aims to improve transparency and end the reputation the UK has built over the years as a laundromat for Russian money and international tax avoidance.  Unfortunately the implications of cracking down on this activity means a steep increase in the compliance costs for all UK limited companies.  By far the biggest change here is that all companies will now be required to make their profit and loss publicly available information.

Going forward this is mandatory for anyone wishing to trade as a limited company.


In addition, all new companies will now require much more detailed background checks on directors and shareholders.  It is likely that photographic ID will me a mandatory part of incorporating a new entity and this is also likely to significantly increase the time it takes to set up a new limited company.


The Frauds Prevented

The upside of this is an end to some of the most common UK company based frauds, like:

  • “The muppet director fraud” – Social media users being paid hundreds of pounds to be the “on-paper” directors of limited companies they know nothing about.
  • Random home owners being used as fake registered offices for fraudulent companies (one story involved a Cardiff flat owner receiving tax bills for 11,000 Chinese firms!)
  • Donald Duck” Directors – companies incorporated with ridiculous made up names and waved through by Companies House.

Companies House themselves have long resisted any attempt to force them to do anything about blatant fraud, arguing with a straight face that their sole responsibility is as box-ticking registrar maintainers.  It seems this era is finally at an end.