UK to mandate XBRL at Companies House as it tackles corporate transparency
The UK’s Department for Business, Energy & Industrial Strategy has this week brought forward two significant measures aimed at increasing corporate transparency with regard to company ownership, and cutting down on economic crime such as money laundering and sanctions evasion.
Of particular interest to our readers will be the white paper on corporate transparency and register reform. This sets out comprehensive reforms to Companies House, the UK’s business registrar, which Secretary of State Kwasi Kwarteng announces “will be transformed into a custodian of accurate and detailed information.”
“In line with international best practice, we will require company accounts to be filed with Companies House in a digital format using the industry standard Inline Extensible Business Reporting Language (iXBRL). We will also require the information to be fully tagged,” states the white paper. “These tags are machine readable, making the information easier to interrogate, compare and check.”
As the white paper observes, financial reporting in the Inline XBRL (or iXBRL) format has been mandatory at HMRC, the UK’s tax authority, since 2016, and it is widely used across the world including in the USA, Japan, China, India and the EU. “By deploying the latest technology, we will create a more informative, responsive and reliable companies register, which will benefit the millions of businesses, investors and other users who access it every day.”
The white paper also contains requirements on identity verification for anyone setting up, running, owning or controlling a company, as well as enhanced data sharing between agencies.
The UK government has also introduced the Economic Crime (Transparency and Enforcement) Bill 2022. It includes the creation of a Register of Overseas Entities owning property in the UK, and an overhaul of the Unexplained Wealth Order regime to make it easier for law enforcement to investigate money laundering.