Part one of this blog covered the new requirement for company directors (including trustee directors) and persons with significant control to verify their identity with Companies House. They will be able to do this voluntarily from 25 March 2025 (the week during which national cocktail-making day, national cleaning week and international waffle day will be celebrated in the US). This requirement is part of measures introduced under the Economic Crime and Corporate Transparency Act 2023 (ECCTA). But are these measures proportionate? Surely there can’t be that many companies in England and Wales registered for fraudulent purposes?

In 2023, the BBC reported that between June and September of that year alone, over 80 companies had been set up using the residential addresses of unsuspecting people living in the same street in Essex. Experts speculated that these companies had been registered in order to launder money or to take out bank loans before closing down the companies and disappearing.

In another case in March 2024, one individual managed to file 800 false documents at Companies House in a short space of time, which recorded the false satisfaction of charges registered by lenders against a total of 190 different companies. Having an accurate register of charges at Companies House is important because it governs the order of priority of payment of debts and, if a company is in financial difficulties, it influences the route by which administrators are appointed and to whom notice must be given.

Meanwhile, Tax Policy Associates, a not for profit company, has published details of its many investigations into fraudulent entities that have been able to set up and use UK registered companies as cover. The investigations it has carried out provide a fascinating insight into the magnitude of the problem. In a few quick steps, Tax Policy Associates demonstrates on its website how it was able to identify a £100 trillion fake company registered at Companies House. It has also highlighted a new scam letter being sent to directors of newly incorporated UK companies from “Company Registry” requiring them to pay a fee, which is one of the ways in which your personal data, published by Companies House, is being used by criminals.

If all this talk of fraud, and the ready availability of personal data filed at Companies House, is making you feel a bit uncomfortable then there is some potentially good news.