A Shift in Cost Structure
Starting from 1st May 2024, the cost of setting up a new business entity, including companies and limited liability partnerships (LLPs) in the UK, is slated for a significant increase, the first of its kind since 2016.
The fee for online incorporation of a new company or LLP will see a leap from the current £12 to £50, and the charge for expedited same-day service will rise to £78.
Unveiling the Fee Adjustments: A Necessary Move for Enhanced Services.
This adjustment in fees is not intended to serve as a revenue stream for Companies House, but rather to offset the expenses associated with delivering their services. The aim is to cover operational costs while enhancing the quality and reliability of the services offered.
Alex John, a product director at IRIS Software, stated that:
"The filing fee, which has not increased since 2016, may seem large, but it will ultimately enable Companies House to deliver a better service and allow accountants to access accurate information on the register."
For international entities seeking to establish a presence in the UK, the incorporation fee will elevate from £20 to £71. Additionally, the cost for filing annual accounts is set to triple, moving from £20 to £62.
The Deterrent Effect: Will Increased Fees Curb Fraudulent Activities?
The updated fee structure is anticipated to act as a deterrent to those considering the establishment of fraudulent entities.
Dame Margaret Hodge, MP for Barking, expressed her support for the updated fees on X (formerly Twitter), stating:
"£12 to set up a business essentially incentivized the creation of phony companies." She further added, "The new £50 fee is a welcome first step to deter mass fraud, promote good business, and empower Companies House to combat economic crime."
However, concerns persist regarding the adequacy of these measures in preventing fraudsters from misusing the identities of unsuspecting individuals for their gain, as illustrated by the recent victimization of celebrity chef Heston Blumenthal.
Moreover, the registration fee for overseas property owners under the mandatory register of overseas entities (ROE) is set to more than double from £100 to £234, with a corresponding fee for any subsequent updates. The cost for removal from the register will jump to £706 from the existing £300.
In conjunction with the fee hikes, Companies House is preparing to implement more stringent online identity verification procedures for company registrations, aiming to further secure the process against fraudulent activities.
In summary, these changes represent a strategic effort by Companies House to refine its operations, ensuring greater accountability and accuracy within the UK's business landscape, albeit at a higher cost to new and existing entities.
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