Companies House Introduces New Non-Compliance Penalties

UK-registered companies are being warned to stay on top of their responsibilities, such as filing a confirmation statement on time or ensuring the company’s PSC information is accurate. Those who ignore these warnings could face a financial penalty.

The new regime is the latest stage in the implementation of the Economic Crime and Corporate Transparency Act 2023, which gives Companies House greater powers to help improve corporate transparency and tackle economic crime.

The Warning Notice

Companies House may issue a written warning notice to the person suspected of a relevant offence. The recipient will have 28 days (beginning the day after the date on the warning notice) to either take the required action, such as filing an overdue confirmation statement, or explain any information they would like Companies House to consider.

The Written Penalty Notice

If satisfactory remedial action is not taken, a written penalty notice may then be issued. At this stage, you will no longer be able to avoid paying the penalty and will still be required to correct your actions. The notice will outline the following:

• Grounds for the financial penalty
• Penalty type
• How the penalty is calculated
• How to pay the penalty or appeal
• When payment is due
• Consequences of not paying (if the notice goes unpaid, Companies House may increase the fine)

Penalties

Under The Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024, Companies House has the power to impose financial non-compliance penalties on any person (a company or an individual) whose conduct amounts to a relevant offence under section 1132A of the Companies Act 2006.

Penalties may be one of the following:

• Fixed penalty – based on the specific offence, previous behaviour, and other factors
• Daily-rate penalty – charged for each day the offence continues
• A combination of a fixed penalty and daily-rate penalty

The financial penalties are calculated using a scale and dividing the offences into levels based on severity. Minor offence penalties range from £250 to £1000, serious offence penalties range from £500 to £1,500, and very serious offence penalties range from £750 to £2000. If you receive a warning notice and fail to take the required action, Companies House may issue further penalties in addition to the original penalty, for example, you may receive a new penalty for each day a confirmation statement remains unfiled.

If a warning notice is ignored, and the penalty notice follows, there will be real financial consequences reflecting the severity of the offence. Severe offences could even result in imprisonment, so it is vital not to ignore the warning.

Avoiding Penalties

The best way to avoid penalties is, of course, to comply with your legal responsibilities as a director or officer of your company. This means ensuring that your company's information is accurate and up to date and that online filings are made on time.