Boost growth or tackle crime? Flip- flopping will hamper both

Companies House, which is already struggling to be efficient, finds itself caught in a tug of war between two political goals.

There must be a sense of motion sickness at Companies House. Included in the Economic Crime and Corporate Transparency Act 2023 was a swathe of provisions intended not only to improve the quality of information on the register, but also to fight back against the use of UK corporate entities in economic crime. But no sooner was it confirmed in July that one such reform, significantly increasing the amount of filing required by small and micro companies, would shortly be implemented, it emerged that Jonathan Reynolds, the business secretary, was minded to scrap it as part of Labour’s assault on red tape.

This apparent reversal – not a U-turn, given it was implemented by the previous government- sat rather oddly with the announcement a fortnight later of a major operation between Companies House, the National Crime Agency and other agencies to strike off 11,500 non-compliant companies and target the businesses involved in their formation and management. Those within Companies House must be asking: are we clamping down on fraud or reducing compliance obligations?

Those goals are not mutually exclusive, but the effect of the 2023 reforms has been a deliberate lurch away from Companies House as a repository of information to an enforcement agency with significant responsibility with respect to economic crime. That may sound sensible, but the approach skips over the
question of whether it is remotely equipped for the task.

Of the 150-odd offences contained within the Companies Act 2006, only one – failure to file accounts and reports – is prosecuted with any consistency. Approximately half the civil penalties for late filings go uncollected. Those who deal with Companies House regularly know that correspondence sent today is unlikely to receive a response in the next fortnight, no matter the urgency. Cases easily resolved without proceedings must often wait until the parties are actually at court before a sensible discussion can be had.

A significant amount of expectation – and statutory power – has been piled onto Companies House, but that is only half the equation. The same concerns must also arise for the Insolvency Service, which has recently announced its own five-year plan to make economic crime a core part of its work.

The idea that either organisation is capable of becoming a serious player in combating fraud and money-laundering, in addition to their core mandates, in the near future is bold. Fighting complex financial crime is hard (just look at the mixed fortunes of the Serious Fraud Office), requiring infrastructure and institutional experience that cannot be acquired in the short-term or with the drag of political flip-flopping.

As long as Companies House is pulled in dierent policy directions – cleaning up UK plc while also reducing friction for business – it will struggle to achieve the transformation expected.

This Article was written by Nick Barnard and first published in The Times, 6 August 2025.