New Companies House penalties for non-compliance

Understanding New Companies House Penalties: New Rules and Compliance Obligations for UK Directors

Companies House has introduced stricter penalties, with fines of up to £2,000 for repeat offenders, targeting businesses that fail to comply with mandatory registration requirements. This crackdown is part of the Economic Crime and Corporate Transparency Act 2023, a pivotal move aimed at combating economic crimes, including money laundering and fraud.

Companies House Penalties: Key Details

The penalties for failing to meet Companies House registration standards begin at £250 for a first minor offence, escalating to £2,000 for recurrent non-compliance. Repeated or more severe violations could lead to civil action, disqualification of directors, or, in the most serious cases, criminal prosecution. Companies House has strengthened its enforcement efforts in collaboration with the Insolvency Service and other regulatory partners to ensure greater transparency and data accuracy on the register.

New companies House Penalties Breakdown

Find below new Companies House penalties breakdown;

Offence SeverityFirst OffenceSecond OffenceThird OffenceFourth or More Offences
Minor Offence£250£500£750£1,000
Serious Offence£500£750£1,000£1,500
Very Serious Offence£750£1,000£1,500£2,000

Companies House penalties vary based on the severity of the infraction, prior behaviour, and other factors. Sanctions may include fixed penalties, daily rate penalties for ongoing offences, or a combination of both.

Process for Penalty Notices and Representations

Find below process of new Companies House penalties.

Warning Notices
Before a penalty is issued, Companies House will send a warning notice outlining the breach. This notice serves as a final alert for the company to take corrective actions. If the required changes are made within 28 days, no financial penalty will be applied, allowing companies an opportunity to avoid the fines.

Representations
Once a penalty is issued, companies have the right to submit a representation to Companies House if they believe the penalty is unwarranted or incorrect. Representations can provide explanations, context, or mitigating circumstances to dispute the penalty. It’s essential for directors to respond promptly to ensure their concerns are thoroughly considered.

Appeal Process
If a representation is rejected and the penalty upheld, companies can appeal to an independent tribunal. This formal appeal process provides an additional layer of review, ensuring fair treatment and transparency. Preparing clear documentation and evidence to support your case will be crucial for a successful appeal.

Enhanced Powers for Companies House

The new legislation strengthens Companies House’s oversight of the company register, enforcing compliance to:

– Ensure timely and accurate submission of documents to the registrar;

– Maintain transparency and prevent any misleading information on the register;

– Discourage unlawful activities or actions that may facilitate economic crimes.

If a company corrects its compliance within 28 days of receiving a penalty warning notice, financial penalties may be avoided. This window provides a crucial opportunity for directors to take prompt action to avoid escalating penalties.

Moving Forward with Compliance

In addition to financial penalties, the Act introduces longer-term measures such as identity verification and accounts reform, which will be phased in gradually to support more robust governance.

Next Steps for Directors

Avoiding Companies House penalties requires staying informed and compliant. The 28-day window following a warning notice provides a critical opportunity for directors to act and avoid fines. Additionally, with further compliance measures on the horizon, such as identity verification and accounts reform, proactive governance will be more vital than ever.

For company directors, understanding and adhering to Companies House requirements has never been more essential. Non-compliance can carry significant financial and legal consequences. At Naail & Co Chartered Certified Accountants, we’re here to help you stay compliant, protect your business, and avoid costly Companies House penalties.

Click here for Companies House approach to financial penalties

Get in touch with our expert team today to learn how we can assist you or book a free initial consultation.

New Companies House penalties for non-compliance
New Companies House penalties for non-compliance

Our service to you

If you are a self employed, business owner/director of company looking to get your accountancy and taxation matters sorted, look no further. We, at Naail & Co, are pro-active and easily accessible tax advisors and accountants in London, who will not only ensure that all your filing obligations are up to date with Companies House and HMRC, but also you do not pay a penny more in taxes than you have to. We work on a fixed fee basis and provide same day response to all your phone and email enquiries. We will also allocate a designated accounts manager who would have better understanding of your and business financial and taxation affairs. Book a free consultation call with one of the leading accounting firms in London using the link below.