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What’s the impact of the Economic Crime and Transparency Act?

10th Jun 2024
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The Economic Crime and Corporate Transparency Act (ECCTA) has shaken up the UK business landscape. Staying ahead of these changes and understanding the impact of them (for both you and your clients) is imperative.

Understanding the ECCTA 

The ECCTA was initially introduced to enhance transparency, strengthen the business environment, and combat economic crime. Since the law came into effect, Companies House has increased powers to now check company details, correct errors, and even impose penalties.

Key changes introduced by the ECCTA 

The ECCTA has brought several significant changes that accountants need to be aware of.

Identity verification for company directors 

One of the most notable changes is the requirement for identity verification for all company directors. This measure aims to enhance data accuracy and reduce the risk of fraud. Accountants will need to ensure that their clients comply with this new requirement to avoid any legal issues.

Expanded powers for the Registrar 

The Registrar's powers have been expanded to actively oversee company creation and manage reliable data. Accountants will need to be diligent in ensuring that all paperwork is submitted correctly and on time. 

Improved financial information 

The ECCTA also aims to improve the quality of financial information on the register. This is intended to provide better support for business decisions. Accountants will need to ensure that their clients' financial information is accurate and complete to comply with these new requirements.

Enhanced investigation and enforcement powers 

Companies House now has more effective investigation and enforcement powers. With data cross-checking capabilities to detect anomalies, this means that any discrepancies in company data will be more easily identified. 

Protecting personal information 

Another important aspect of the ECCTA is the better protection of personal information. This measure aims to fend off fraud and protect individuals' privacy. 

Deter misuse of corporate entities 

Broader reforms are also planned to deter the misuse of corporate entities, including measures to prevent companies from being used for illegal activities.  

Fee increases 

With the introduction of the ECCTA, there has also been an increase to a number of fees. These increases affect those who handle company secretarial matters for their clients. Fees have been increased for incorporating a company, filing CS01s, and other company secretarial activities. 

Help your clients navigate the ECCTA 

As an accountant, your clients will look to you for guidance on navigating the new regulations introduced by the ECCTA. By understanding the key changes introduced by the ECCTA, you can educate your clients, helping them navigate these new regulations. 

Join our upcoming webinar on Wednesday, where we’ll be joined by former President of the ICAEW, Julia Penny. In the webinar, Julia will cover the key changes the ECCTA has brought onto companies, and how you and your clients can best navigate them. Register now to secure your spot and stay ahead of the curve. 

eleanor vaughey

 

 

Written by Eleanor Vaughey | Bright