The UK’s Companies House, responsible for managing the national companies register, has amassed a modest £1,250 in fines since being granted enhanced powers to combat corruption. Despite an initial surge in penalties following the new rules, the financial teeth behind the crackdown appear to have only biting minimally. The government has announced that among the fines issued since last October, which totaled a value of £58,500, the collection rate stands at a mere 2%. A spokesperson for the Department for Business and Trade clarified that the collection efforts regarding these penalties will intensify, with the likelihood of outstanding debts being passed on to debt collection agencies and litigated through the courts.
The modest sum of fines collected to date underlines deeper concerns regarding the capacity of Companies House to effect change in the face of fraudulent and misleading practices. The agency´s new powers include tighter identity checks for company directors and the ability to impose penalties for non-compliance, such as errors in filing ownership information. These reforms have been rolled out partially in response to the alarming frequency of fraudulent registrations, with figures suggesting that up to 20% of the nearly 5 million businesses on the database may have provided false information.
The limited impact of the fines regime has sparked criticism over Companies House’s capacity to enforce less severe sanctions effectively. Liam Byrne, chair of the business select committee, has decried the regime as insufficient to tackle the issue of companies built on deceit, which can facilitate economic crimes such as sanctions evasion and money laundering. He also pointed to significant vacancies in digital roles within the agency as a further obstacle to achieving comprehensive reform.
Byrne stressed that the register’s role extends beyond mere record-keeping; it is now a crucial frontline defense against financial irregularities. He advocated for decisive action and rigorous enforcement rather than relying on warnings or good intentions to drive compliance.
Companies House maintains that financial penalties are a viable enforcement tool and asserts that it is implementing the penalties strategically to promote compliance. The agency has outlined plans to pursue penalty payments through legal means when necessary, indicating a willingness to deal with non-compliance more sternly as the system matures.
Byrne’s letter to Companies House last month further highlighted issues including the use of registered businesses for illicit activities and the concern surrounding the vacancies that might impede the agency’s digital transformation initiative.
The highly symbolic case of fine-sized sanctions against fraudulent corporate practices has become emblematic of broader deficits in regulatory oversight and enforcement in the UK. While the fines stand low both in number and in value, there is a clear indication that Companies House intends to become more assertive in its ability to levy and collect these financial deterrents.
Source: https://www.theguardian.com/business/2025/apr/06/companies-house-uk-fines-corruption-crackdown
