COMPANIES House – the UK’s register of businesses – is to become a “gatekeeper” in an effort to cracked own on fraud and money laundering.

Businesses will no longer be able to present a different version of their financial position to Companies House from the one they give to HMRC.

Amanda Brockwell, partner in the corporate team at Southampton law firm Paris Smith, said: “Anti-fraud measures and greater transparency are going to be introduced in sweeping reforms to processes at Companies House.

“Businesses will no longer be able to provide differing versions of their financial position to Companies House and HMRC under the proposed reforms, which come at a cost of £83million.

“As part of the government’s crackdown on the laundering of overseas dirty money, Companies House is set to change from a ‘passive administrator to more active gatekeeper’, with the reforms set to be fast-tracked.”

All organisations registered Companies House will be required to have at least one person verified with biometric data recorded on the public register.

The registrar will have powers to query suspicious appointments or filings and request further evidence, or reject the filing.

Companies House will also be able to share more data with law enforcement agencies, other government bodies and the private sector.

Ms Brockwell said: “At the moment, parties based overseas and not subject to UK money laundering regulations are permitted to form UK companies - and it’s possible to register an appointment without the knowledge or consent of the person being registered.

“It’s also possible to find that a company has claimed a stronger financial position in its Companies House filings (to impress stakeholders), compared to its returns to HMRC (in order to reduce its tax liability). These loopholes will close.

“Current controls on phoenix trading – where a business transfers its assets but not its debts to a company with a similar name and common directors – apply only if misconduct is identified under the insolvency regulations. Under the changes, ‘the vast majority of individuals incorporating or filing with Companies House’ will have to verify their identities with official documents checked against the holder’s biometrics. If an individual fails to verify, this will be noted on the public register, enabling anyone contemplating doing business with them to make their own assessment of risk.”

All small companies will be required to file a profit and loss account, she said – and all accounts filed with Companies House would have to be in a digital format, using the industry standard iXBRL mark-up language to make them machine-readable.