Companies House proposal to wipe data on dissolved firms sooner decried

Millions of public records used to track down white collar criminals and combat money laundering would be deleted under proposals being considered by the government’s company registration agency.

Companies House maintains a database on every firm incorporated in the UK, providing access to their accounts and listing all directors and shareholders. But the agency is facing mounting pressure from businesses – and reportedly from members of parliament – to take down valuable information.

Proposals are being considered to reduce the amount of time the records of dissolved companies are retained, from 20 years to six. If the rules are changed, more than 2.5m records could be lost. Campaigners are warning that such a move would be a major step back in the global fight against corruption.

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.

Alex Cobham, director of research at the Tax Justice Network said the proposal “flies in the face of the government’s previous leadership on corporate transparency, and against the criminal market abuse that follows from opacity”.

“The marginal cost of storing and maintaining open access to data is near zero – so the only possible reason for this proposal is to make it easier for people to hide their track record. And what gets hidden? Little that is good. Histories of administration and liquidation, along with the trails that might otherwise be followed by law enforcement officials from the UK and elsewhere tracing various forms of corruption and tax abuse.”

Complaints have increased since Companies House made its information available free to the general public, via a rapidly searchable website, in June last year. Requests for previously paid-for information are running at 2m a day. Approximately 64m searches were made in the nine months from June 2015 until the end of March 2016, according to the organisation’s annual report.

A Companies House spokesman said: “We are currently considering the correct period for which records of dissolved companies should be kept on the register. This issue is being considered following a number of complaints made by members of the public who believe that retaining, and making publicly available, information relating to long-dissolved companies is inconsistent with data protection law.”

There is no time limit for records to be kept under data protection law, but business people linked to dissolved companies have been citing the legislation when arguing for a shorter retention period, and complaints have been filed with the data protection watchdog, the Information Commissioner’s Office.

The Opencorporates group, which works to improve transparency by publishing free information on 107m companies worldwide including those on the UK register, said it was currently receiving a dozen requests a day from those keen to have their details taken down. It believes records should be retained for as long as possible.

“It is essential that the greatest publicity be given to companies so that everyone knows who they are doing business with,” said Opencorporates founder Chris Taggart. “While directors and owners enjoy protection from company debts under the law, the quid pro quo for that is transparency. The vast majority of people in any country are not company directors or shareholders, but they do work for companies and buy from companies.”

Companies House records currently stretch back to 1996. A look back through the earliest available annual reports shows that between 2000 to 2010, about 2.3m companies were dissolved in the UK.

Information on companies associated with Dominic Chapell, the three times bankrupt director who was running the BHS department store chain when it collapsed, would no longer be available if the proposals to keep records for six years only were in place today.

Earlier this year, Spain’s industry minister, José Manuel Soria, was forced to resign after his links to an offshore company in the Panama Papers was exposed using information on long-dissolved UK entities controlled by his family.