The government is to consult on proposals to reduce the amount and frequency of the information companies need to file with Companies House, as part of its initiative to cut down on unnecessary and burdensome red tape, reports Harris & Co chartered accountants.
A key proposal is the suggested removal of the requirement to complete a mandatory annual return.
Instead, the Department for Business Innovation and Skills (BIS) says companies could either digitally confirm each year that the information held by Companies House is correct or update it as and when it changes.
In addition, the consultation is looking at whether the return could still be retained, but better aligned with the filing requirements for the annual accounts which show the performance of the company in the latest financial year.
Other suggested changes include making it easier to jointly file annual accounts to Companies House and HMRC by improving the online filing system for Companies House, and making more use of email for company communications.
It would no longer be necessary to send a ‘consent to act’ note sent to Companies House when a director is appointed, with companies simply confirming they have this and only providing such material in the event of a dispute or legal proceedings. Companies would also be given the option of holding their register of directors and shareholders at Companies House.
The consultation is looking at reducing the time it takes for a company to be struck off the register at Companies House in specific circumstances, which could be cut from the current six months to around six weeks. There are several options designed to help tackle fraud or identify theft, such as requiring companies to provide a demonstrable link with their registered office in the event of a complaint, and concealing date of birth details of directors.
BIS also wants to improve the reporting of company subsidiaries, suggesting that either companies report their total number of subsidiaries, or at least report them in one return, and is also looking at simplified processes for statements of capital.
BIS says the proposals will cut the time and costs involved in company filing and are likely to be especially beneficial for SMEs, whose details do not vary from year to year.
Danielle Stewart, head of financial reporting at Baker Tilly and the government’s company and commercial red tape challenge champion, described the proposals as ‘well thought out, helpful, deregulatory and practical’, and said: ‘I am particularly excited by the way that the proposals achieve a material reduction in work for companies without any noticeable reduction in information available to the public, by removing duplication and making best use of technology.’