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Companies House plans widely criticised

Member: Nifa

There has been severe criticism of the proposal by Companies House to erase the accounts of dissolved firms after six years in an attempt to reform the storage and public access of data. According to forensic accountants, this would disrupt investigations into corruption and fraud and reverse the UK’s push to be a global leader in “open data”. As one commented, the move could “significantly limit the scope of some investigations”.

Companies House manages a database on all registered UK firms and last year its digital information was made available online and free of charge. However, in its latest annual report the organisation said that the increased transparency “has led to a number of concerns being raised regarding the availability of personal data”.

As well as forensic accountants, police investigators, the National Crime Agency, the Serious Fraud Office, lawyers, journalists and bank compliance teams all make extensive use of the data, with many searches involving dissolved companies and their directors.

If the rules are changed, more than 2.5 million records could be lost and critics warn that such a move would be a major step back in the global fight against corruption. As a spokesman for the Tax Justice Network pointed out, the cost of storing and maintaining open access to data is “near zero”, so the only possible reason for the proposal is to make it easier for people to hide their track record.

Forensic accountants look at histories of administrations and liquidations, along with the trails that might be followed by law enforcement officials from the UK and abroad tracing various forms of corruption and tax abuse. Without these records, justice will be that much harder to achieve, as fraudsters’ wrongdoings will be hidden.

Author: Roger Isaacs, 5 August 2016

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