How the Economic Crime Act Will Affect Accountants in March 2024 

Heralded as a landmark piece of legislation, the Economic Crime and Corporate Transparency Act received Royal Assent on 26 October 2023. 

The Act aims to combat money laundering in the UK by empowering Companies House to play a more significant role in tackling economic crime and supporting economic growth.  

It addresses the issue of businesses being established under fictitious identities and hopes to improve transparency by including more accurate and trusted information on Companies House registers. 

With another raft of new rules due to be introduced in the next few weeks, we look at the changes that are due to come into force in March and consider their impact on the accountancy sector. 

Who do the changes made under the Economic Crime Act affect? 

The Economic Crime Act introduces new responsibilities for:  

  • All new and existing company directors. 
  • People with significant control of a company (PSCs). 
  • Anyone who files on behalf of a company. 

What changes will be made under the Economic Crime Act in March 2024? 

Most of the changes due to be introduced in March focus on the additional powers for Companies House to improve the quality of data on their registers. 

These include: 

  • Greater powers to query information. Companies House will be able to scrutinise and reject information that seems incorrect or inconsistent with information already on the register. In certain instances, Companies House will also be able to remove information. 
  • Stronger checks on company names. 
  • New rules for registered office addresses, including companies not being able to use a PO Box as their registered office address. 
  • Requirement for all companies to supply a registered email address. 
  • Requirement for all companies to confirm they’re forming the company for a lawful purpose when they incorporate and continue this pledge on their annual confirmation statement. 
  • Annotations on the register to inform users about potential issues with the information supplied. 
  • Steps to clean up the register, including using data matching to identify and remove inaccurate information. 
  • Sharing data with other government departments and law enforcement agencies. 

What will the changes mean for accountants? 

Accountants must ensure that their anti-money laundering (AML) processes and policies are robust to remain compliant with the new rules. 

The most significant changes for the accountancy profession include: 

  • Accountants must have in place effective due diligence procedures and undertake thorough background checks to verify the good conduct and character of their clients.  
  • The process of submitting information about clients to Companies House should be reviewed and updated, if necessary, so that it is robust.  
  • Accountants should think twice about using their office address as a registered office for clients. This is a considerable risk as any evidence of wrongdoing will be linked, and they could face prosecution. 
  • Accountants must ensure they add clients’ email addresses to their records. 
  • Accountants must ensure clients do not use PO Boxes as a registered office address. 
  • All relevant changes to internal procedures must be communicated effectively to staff and clients and incorporated into AML policies. 

What do accountants think of the changes? 

The accountancy sector has welcomed the changes introduced by the Economic Crime Act.  

Glenn Collins, head of technical and strategic engagement at the Association of Chartered Certified Accountants (ACCA), said: “Integrity of corporate information is vital in a modern, open economy,” and, “to support business decisions, UK businesses need to be confident the companies register has reliable and complete information.” 

Mike Miller, Economic Crime Manager at the Institute of Chartered Accountants in England and Wales (ICAEW), said: “It’s vital for both the business community and the public interest that the platform contains accurate and verified company data, and these changes should achieve this.” 

What other changes are likely? 

Processes will continue to be reformed over the coming months and years. Additional changes include:  

  • Changes to identity verification. 
  • Streamlining accounts filing options for small and micro-entity companies. 
  • Transitioning towards filing accounts by software only. 

For more information on the proposed Economic Crime and Corporate Transparency Act changes, click here

AML Solutions for Regulated Services 

We can help organisations of all shapes and sizes from across different sectors undertake a review of their policies, controls, and procedures to ensure that they are compliant with AML regulations and, therefore, avoid any breaches. 

A review of this nature provides valuable insight into a business when performed correctly. Along with an overview of risk, these crucial assessments also highlight issues within the business, so it is essential to undertake a proper review. All of a company’s building blocks must be considered, including its staff, clients, operations, and finances. 

By working with AML & Compliance, a business can be assured that we will bring the required level of knowledge and expertise needed to perform the review, which adds value to the business and is not simply a box-ticking exercise. Our team can also provide a full range of services that include: 

  • Consultancy. 
  • Compliance Policies. 
  • Training. 
  • Handbooks. 
  • Auditing. 

Our services focus on businesses’ Anti-Money Laundering and Regulatory requirements through the implementation of effective policies, procedures, training, and consultancy. We also provide continued monitoring of staff and ongoing training to ensure that everyone within a business is aware of the latest requirements and complies with their responsibilities. 

We offer a full range of services focused on ensuring businesses across all regulated sectors create, maintain and evidence their compliance with the requirements of their regulators and legislation. We work with businesses of all sizes, from the smaller high street or niche businesses to the large multi-office and multinationals. 

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We adopt a sensible and pragmatic approach to fees, ensuring we are competitive and always add value. As necessary, we will agree on packaged services to control cost and enable clients to spread payments to alleviate cash flow, yet ensure services are provided when needed. 

If you want to discuss our services in more detail, contact us at 0203 985 8553, email us at info@amlandcompliance.co.uk or complete an enquiry form. 

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