This month sees the start of a new era of digitisation as both HMRC and Companies House make the move towards increased digitisation.
Whilst the move to digital-only filings with Companies House won’t have a massive impact on most businesses, the move might be more difficult for those with wider company secretarial responsibilities.
If you are part of the 35 per cent who aren’t compliant, you need to know how you can get to grips with the digitisation of Companies House and HMRC and how you can stay ahead of the upcoming changes.
Keep up to date with legislative changes
Although the new legislation came into effect from March 2024, you need to ensure you know what power Companies House has and how it will affect you if you are not compliant.
The new legislation now gives Companies House the power to:
- Mandate how businesses file their accounts
- Improve accuracy
- Improve transparency
- Improve trusted information on its registers
Your business should have already confirmed your activities are above board with the statement of a lawful purpose upon incorporation, and on their annual confirmation statement at least once per year.
If you have not already done so, you need to make sure you send this information to Companies House to ensure you are compliant with current legislation and are prepared should legislation change and for when software-only filing is fully in practice.
You need to know that software-only filing will be phased in over the next two to three years depending on company structure and filing schedule.
All companies will need to conform by April 2027 so it is important you understand the ins and outs before this deadline.
Digitisation applies to businesses across the board, from solo-run businesses to start-ups and SMEs so you must be ready for the April 2027 deadline but it is crucial you start to implement the changes into your tax reports from this point onwards.
What are the upcoming changes?
Company secretarial and equity management might be next in line for digitisation by Companies House and HMRC so here’s how you can get ahead of the changes before they come into effect.
This means that the legal obligation, under the Company’s Act to update Companies House with any changes to your equity, might fall victim to inconsistencies.
This can bring additional paperwork and administration as not only is much of the administration a legal requirement, but it can also make a large impact on the growth of your business.
To take care of any additional admin, make use of the available digital tools with Companies House integration, which include:
- Managing shareholder information
- Updating people with Significant Control (PSCs)
- Maintaining an accurate cap table
What are the wider benefits?
It might seem like moving towards software-based filings is another hoop for your business to jump through, possibly costing you time and potentially money.
But, if the new legislation is adhered to correctly, then the digitisation will have the power to go beyond regulations and potentially transform your business.
The main benefits of digital formats help to make your business’s data easier for regulators and investors to assess, as well as removing the aspect of human error from the process.
For your business, the move to digitisation will improve:
- Accuracy
- Efficiency
- Adaptability
These will all help to streamline your processes and cut out parts of the laborious manual tasks that are associated with paper or web-based filing.
Increased digitisation can reduce your paperwork, ensure accuracy and transparency to help attract investment that will take your business to the next stage of its growth.
Software-only filings can be a difficult obligation to navigate but, with the help of our experts, you can get your business ahead of regulations and embrace the benefits before the changes come into effect.
For more information on how the continued digitisation of Companies House and HMRC will affect you, contact a member of our team today.