Companies House has collected just £1,250 in fines despite being handed new powers to tackle fraud and corporate abuse, prompting concern from MPs over the UK’s commitment to cracking down on economic crime.
The agency, which maintains the official register of companies in the UK, was granted new enforcement powers last autumn as part of long-awaited reforms designed to prevent fraudulent business registrations. However, in response to a parliamentary question from Liam Byrne MP, chair of the Business and Trade Select Committee, it was revealed that just 234 penalties had been issued so far – with a total value of £58,500. Only 2 per cent of that sum has actually been recovered.
“Action to collect penalties will accelerate during summer 2025,” said Justin Madders, a junior minister at the Department for Business and Trade. “Outstanding penalties will be referred to debt collection and litigation where appropriate.”
The news comes as Companies House continues to face criticism over its ability to prevent the misuse of UK corporate structures. The agency has become a target for fraudsters and even pranksters, with bogus company names such as “Darth Vader” and “Santa Claus” previously accepted onto the official register.
Reforms currently being rolled out include mandatory identity verification for company directors and tougher checks on beneficial ownership. These follow an admission from the agency that up to 20 per cent of the 4.9 million businesses on its register may have submitted false or misleading information.
Byrne, who has been a vocal critic of the pace of reform, said the minimal level of enforcement undermines the government’s promises to clean up the UK’s corporate landscape.
“When up to 1 million companies are built on lies, it’s time for Companies House to get tougher,” he said. “It’s no longer just a register – it’s the frontline in the war on economic crime.
“We won’t defeat fraud with warnings. We won’t clean up the system with good intentions. We need action. We need enforcement. And that means using the power to punish those trying to corrupt our economy, dodge sanctions or launder cash.”
Companies House said the penalties were part of a broader strategy and would be rolled out in phases. “Financial penalties are one sanction that is available to Companies House and is an important part of our overall enforcement,” a spokesperson said. “Volumes will increase over time to address non-compliance. We have robust processes to pursue the payment of penalties, including taking court action where necessary.”
But concerns persist over the agency’s capacity to implement reforms effectively. Byrne has warned that a 20 per cent vacancy rate in digital roles at Companies House may be hampering its transformation plans, and that loopholes in the system continue to be exploited for sanctions evasion and money-laundering – sometimes with the alleged assistance of UK nationals.
The revelations add further pressure on ministers and civil servants tasked with overhauling the UK’s business registry, which has long been criticised as one of the weakest links in the country’s economic crime defences.
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Companies House collects just £1,250 in fines despite new powers to tackle fraud
