UK firms unprepared for Companies House crackdown
Significant changes are set to come into effect at Companies House over the next few months, but new research shows most managers are unprepared for the transition.
With key provisions of the Economic Crime and Corporate Transparency Act (ECCTA) about to take effect, new research from Vistra reveals that only 28 per cent of UK company directors feel ready.
The findings, shared exclusively with City PM, come as Companies House signals a strict enforcement approach, including the potential for unlimited fines and director disqualification.
Vistra’s survey showed a troubling lack of preparedness, particularly among small and medium-sized enterprises.
None of the smallest firms surveyed felt ‘very prepared’, and even among the largest firms, just 37 per cent said they were confident in their readiness.
A key requirement under ECCTA is mandatory identity verification for directors, persons of significant control (PSCs), and company filers.
Yet despite 21 per cent of directors claiming they’re compliant, Companies House data shows that only 2.86 per cent have actually completed the process – highlighting a significant gap between perception and reality.
Among smaller businesses, 83 per cent report having no ID-check process in place, and fewer than half are confident they know who their PSCs are.
Fraud crackdown
The most urgent concern is the new ‘failure to prevent fraud’ offence, which takes effect on 1 September 2025.
Just 19 per cent of directors say they are currently compliant with this requirement, and only 38 per cent feel confident their fraud prevention measures would qualify as a statutory defence.
The new law will hold companies liable for fraud committed by employees, agents, or subsidiaries unless they can demonstrate they had ‘reasonable procedures’ in place to prevent it.
Although recent government announcements have paused some EECTA-related requirements, such as the mandatory filing of profit and loss accounts for small companies, compliance experts stress that this is only a temporary reprieve.
Other key obligations, like identity verification and fraud prevention, remain firmly on track for enforcement.
Meg Ogunsola, Vistra’s global director of entity management solutions, said: “The ECCTA remains critical in the UK’s fight against fraud”.
She added that the government is trying to balance “protecting and overburdening firms” -especially tricky in a time of high inflation and economic uncertainty.