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Fee for registering a company to increase tenfold under plans to tackle economic crime

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Fee for registering a company to increase tenfold under plans to tackle economic crime

The fee for registering a company is to rise to as much as £100 as part of a crackdown on economic crime. 

Companies House, the corporate register, is considering the increase in charges as a way of funding new responsibilities to tackle illegal activity that it is gaining under laws going through Parliament. Registration fees currently start at just £10.

The agency is poised to receive beefed-up powers and responsibilities that will require it to police the information submitted by companies and directors, ensuring that it is accurate.

It is part of changes proposed by ministers to stem the tide of dirty money flowing into the UK after new scrutiny in the wake of Russia’s invasion of Ukraine. 

Companies House – which currently has around 1,000 staff – has said it will need to take on at least 100 extra people to enforce the rules, as well as retraining some existing employees. 

On Friday, a spokesman for the Government confirmed that legislation will allow “the cost of investigative and enforcement activities… to be met through fees”. 

However, Martin Swain, director of strategy and policy at Companies House, said the organisation was still in talks about what its future funding would be and how much would come from higher fees. 

In a report earlier this year, MPs on the Treasury Select Committee called for the company registration fee to be increased to £100. 

They claimed that this would not be high enough to deter genuine entrepreneurs, but would raise significant additional funding for the fight against economic crime.

Mr Swain told MPs on Tuesday that Companies House had been allocated a one-off sum of £63m for the overhaul, but had not yet agreed its budget for the 2023/24 financial year – which starts in April – with the Department for Business.

Speaking to a public bill committee, he said: “It is fair to say that we have been clear with the department and Treasury that we are taking on significant new functions and responsibilities. 

“Some of that will require more people and people with different skills from those that we have now. 

“We could increase fees to pay for additional resources. I know there is some challenge around the fee being too low.”

Anti-corruption campaigners have said for years that the rock-bottom fees for registering companies in Britain, and a lack of oversight of information submitted to Companies House, have made the country a magnet for money laundering. 

Ministers are attempting to address these concerns with a string of provisions in the newly proposed Economic Crime and Corporate Transparency bill.

The bill attempts to transform Companies House from a “passive” entity to a “guardian” of accurate corporate information, which will have the ability to challenge businesses and demand that company directors prove their identities. 

As part of this, the register will also gain new powers to change the fees charged for various services, helping to fund its new functions and recoup the costs of verifying information. 

Nick Van Benschoten, the head of anti-money laundering at banking trade group UK Finance, said that countries currently charging similar amounts to Companies House include Benin and Turkmenistan, both countries where corruption is widespread.

He told MPs: “I am not sure that is the company the UK wants to keep. 

“It is important to note that in other EU countries with major financial centres, it is in the £50 to £100 range. That does not seem an unreasonable amount for us.”

On Friday, a Government spokesman said: “The UK already has some of the strongest controls in the world to combat money laundering, but we are continuing to upgrade our governance to crack down on criminals.

“The Economic Crime and Corporate Transparency Bill bears down on the use of thousands of UK companies and other corporate structures as vehicles for facilitating international money laundering, fraud, corruption, terrorist financing and illegal arms movements.”

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