The first set of changes under the Economic Crime and Corporate Transparency Act were introduced on 4 March 2024, and it is set to bring significant changes to businesses in the UK, including small and medium-sized enterprises (SMEs).
At Penn Accounts, we believe it is essential for directors and SMEs to understand these updates and how they will affect your business operations in the future.
Here is an overview of the key changes the Economic Crime and Corporate Transparency Act will bring:
1. Greater Transparency Requirements
SMEs will now be required to disclose more detailed information about their ownership structures. Companies House will enforce stricter reporting, with an emphasis on beneficial ownership. The aim is to increase transparency around who controls businesses, helping to combat fraud, money laundering, and other economic crimes.
2. Stricter Identity Verification
New identification checks will be introduced for company directors and beneficial owners. SMEs will need to ensure that directors’ identities are properly verified before registering with Companies House. This move is designed to prevent criminals from exploiting businesses for illicit activities.
3. Heavier Penalties for Non-Compliance
Failure to comply with the new regulations can result in severe penalties, including fines and, in some cases, criminal charges. SMEs will need to ensure that all filings and disclosures are accurate and submitted on time to avoid these consequences.
4. Simplified Administrative Processes
While the Act introduces more transparency requirements, it also aims to streamline certain administrative processes, particularly around filing and reporting. This should reduce some of the bureaucratic burden for SMEs while still maintaining regulatory compliance.
5. Enhanced Accountability for Directors
Company directors will be held to higher standards under the new legislation. Stricter checks on their backgrounds and a requirement for more transparent reporting will help ensure that those in control of SMEs are accountable.
How Penn Accounts Can Help
The changes introduced by the Economic Crime and Corporate Transparency Act are significant, and SMEs will need to adapt to stay compliant. You can read more HERE.
At Penn Accounts, we are here to support you through this transition. Whether it is helping you navigate the new reporting requirements or ensuring your directors meet the new standards, our team is ready to assist.
If you have any questions about how this Act may affect your business, please contact us for more information.
Stay compliant and protect your business with Penn Accounts.
0207 183 6623
The information provided in this article is not intended to constitute professional advice and you should take full and comprehensive legal, accountancy or financial advice as appropriate on your individual circumstances by a fully qualified Solicitor, Accountant or Financial Advisor/Mortgage Broker before you embark on any course of action.
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