How an obliged entity can make a report if there’s a material discrepancy between the information it holds about a person with significant control (PSC) or registrable beneficial owner of an overseas entity, and the information on the Companies House register.
What a material discrepancy is
This is when the information an obliged entity holds is significantly different to the information recorded by Companies House about a PSC of a company, or a registrable beneficial owner of an overseas entity.
Reporting of material discrepancies is an obligation under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. On 1 April 2023, an amendment came into effect. This means that obliged entities must only report a material discrepancy if it can reasonably be considered to be linked to one or more of the following:
- money laundering
- terrorist financing
- concealing details of the business of the customer
The details of the business of the customer include a PSC (see Regulation 30A (1)(a-e)), or the registrable beneficial owner of an overseas entity (see Regulation 30A (1)(f)).
Obliged entities do not need to consider whether concealment is deliberate or not. An obliged entity must consider whether the information could objectively be considered to conceal the details of the PSC of a company, or a registrable beneficial owner, from the register.
Any reference to companies in this guidance also refers to limited liability partnerships (LLPs) and eligible Scottish partnerships. Money laundering and terrorist financing are defined in regulation 3 of the Money Laundering Regulations.
Detailed information about what is expected of obliged entities in relation to the prevention of money laundering and terrorist financing is also available from your supervisory body and applicable industry guidance.
Discrepancies that are not ‘material’
If you conclude that a material discrepancy is not ‘material’, in cases where a discrepancy could not reasonably be considered to be linked to money laundering, terrorist financing or conceal the details of the business of the customer, you do not need to report it to Companies House.
In these cases, for PSC details, you may want to contact the company to advise them to make a PSC filing to correct the discrepancy.
If the overseas entity needs to update registrable beneficial owner details, they can contact us at email@example.com.
If there is a missing entry for a registrable beneficial owner due to the overseas entity not being registered, and you hold information to suggest it should be, you can report this by emailing us at firstname.lastname@example.org.
Suspicious Activity Reports (SARs)
Do not use a discrepancy report in place of a SAR, and do not use a SAR in place of a discrepancy report. In some cases, you may need to submit both a discrepancy report and a SAR. You should not tell us if you have submitted a SAR.
Examples of material discrepancies
When you conclude that the discrepancy is linked to the conditions of money laundering, terrorist financing or concealment, the discrepancy is considered ‘material’ and is therefore reportable.
Material discrepancies that could be linked to these conditions may include the following examples.
A difference in name
The person or entity could be considered to be a different person or entity rather than a spelling error, such as an omitted, incomplete, or inverted:
- PSC surname
- registrable beneficial owner surname
- relevant legal entity (RLE) name
- Smith Maria instead of Maria Smith (forename and surname reversed)
- John Smith instead of Paul Smith (different name)
- John Smythe instead of John Smith (different spelling indicates it could be a different person)
- Amira Brown instead of Amira Wallace-Brown (part of hyphenated surname missing)
- Sunshine News Limited instead of Sunshine News International Limited (part of registered company name missing)
An incorrect entry for nature of control
The PSC’s natures of control do not correctly reflect the control they hold in terms of the qualifying conditions in the Department for Business and Trade (DBT) guidance on the register of people with significant control (PDF 1,806KB).
This includes incomplete natures of control, such as missing voting rights.
- an individual who holds more than 25% of the shares is notified as a PSC with ‘significant influence or control’
- an individual who holds 50% of the shares is notified as a PSC with ‘ownership of shares – more than 50% but less than 75%’
- an individual who holds more than 25% of the shares and attached voting rights is notified as a PSC with ownership of shares only
- an entity is notified as a PSC with ‘ownership of shares – more than 50% but less than 75%’ however an individual is identified as directly owning 100% shares
This also applies if a registrable beneficial owner’s natures of control do not correctly reflect the control they have.
An incorrect entry for date of birth
The PSC’s or registrable beneficial owner’s month or year of birth (or both), as verified by the obliged entity, does not match what is shown on the Companies House register.
For example, the date of birth on an individual’s passport is 24 May 1985, but the month and year of birth shown in their PSC or beneficial owner information on the register is October 1985.
An incorrect entry for nationality
The PSC’s or registrable beneficial owner’s nationality, as verified by the obliged entity, does not match the nationality shown on the Companies House register.
For example, an individual has provided a French passport as proof of nationality, however the nationality shown in their PSC or beneficial owner information on the register is British.
An incorrect entry for correspondence address
The PSC’s or registerable beneficial owner’s address significantly differs from the address on the register, such as the property number or the postcode.
For example, the first line of an individual’s correspondence address is ‘4 Daisy Lane’, however the first line of their correspondence address is shown on the Companies House register as ‘The Mill, Daisy Lane’.
A missing entry for a PSC or a registrable beneficial owner
An individual or legal entity that qualifies as a PSC or RLE is not recorded as a PSC or registrable beneficial owner.
For example, you have established that an individual holds more than 25% of the shares, however the individual is not recorded on the register as a PSC or beneficial owner.
The report should include the reason why the obliged entity believes that the individual would qualify as a PSC or beneficial owner.
An incorrect entry for the date the individual became a registrable person
The date that an individual became a PSC or registerable beneficial owner does not match the date on the register.
For example, an individual or legal entity’s notification date is shown as 12 June 2019 on the Companies House register, however their notification date was 27 June 2020.
What a person with significant control (PSC) is
A person with significant control (PSC) is someone who owns or controls a company. A company can have one or more PSCs, or none.
A beneficial owner (as defined in the Money Laundering Regulations) is not always the same as a PSC.
The requirement to report discrepancies is based on the Companies Act definition of a PSC. This means that the information on the Companies House register might be different to beneficial ownership information collected for the purposes of meeting the requirements of the Money Laundering Regulations, but it might not be wrong.
Where you conclude that a discrepancy is the result of the difference between the definitions of a PSC and beneficial owner, that discrepancy is not material and therefore does not need to be reported.
For more information, see PSC requirements for companies, LLPs and Scottish qualifying partnerships.
What a registrable beneficial owner of an overseas entity is
A registrable beneficial owner is any individual or entity that has significant influence or control over an overseas entity that owns (or information you hold indicates they intend to own) UK land or property. It can be:
- an individual person
- another legal entity, such as a company
- a government or public authority
- a trustee of a trust
- a member of a firm that is not a legal person under its governing law
You can find out more from Companies House guidance on the Register of Overseas Entities.
What an obliged entity is
This is any entity required to carry out due diligence checks under the Money Laundering Regulations.
Obliged entities include:
- credit institutions
- financial institutions
- auditors, external accountants or tax advisors
- notaries or other independent legal professionals
- trusts or company service providers
- estate agents, including when acting as intermediaries
- letting agents letting land for the equivalent of €10,000 per month or more
- other persons trading goods in cash amounting to €10,000 or more
- exchange services between virtual and fiat currencies
- custodian wallet providers
- art market participants
- operators of freeports storing works of art
- insolvency practitioners
Obliged entities must tell us when they identify a material discrepancy between the information on the Companies House register, and the information they have identified in line with Money Laundering Regulations about a:
- PSC of a company
- PSC of a limited liability partnership (LLP)
- PSC of an eligible Scottish partnership
- registrable beneficial owner of an overseas entity
If you’re not an obliged entity, do not use this service to report a PSC or registrable beneficial owner discrepancy. If you want to update your PSC details, you can tell Companies House about changes.
Why you need to report a discrepancy
Regulation 30A of the Money Laundering Regulations requires obliged entities to report material discrepancies to Companies House.
It is important to identify those who seek to undermine the UK’s open business environment to facilitate economic crime. This will enhance the accuracy and reliability of the company register, which plays an important role in tackling economic crime.
What you do not need to report
You do not need to report the following:
- if a discrepancy is not reasonably considered to be linked to money laundering, terrorist financing or to conceal details of a PSC or a registrable beneficial owner, it does not need to be reported to Companies House
- if you’ve already made a discrepancy report, you do not need to report the same material discrepancy again
- if the material discrepancy is resolved before you submit a report, you do not need to report it - see When to obtain an extract and make a discrepancy report
- when an obliged entity holds information that is not required to be included on the Companies House register
- a spelling error - for example, Jon Smith instead of John Smith, or a missing or slightly different spelling of a middle name
- a shortened name - for example, Jim instead of James
- minor variations in an address – for example, Glos Rd instead of Gloucester Road
- where the nationality of Welsh, English, Scottish or Northern Irish is given to the obliged entity, but the register shows UK
- where a company has claimed an exemption from providing their PSC details because they are trading on a regulated market, PSC details will not be shown on the register
- if a person or company owns less than 25% of shares they are not registrable as a PSC or a beneficial owner of an overseas entity - this does not affect the duty in terms of PSCs or registrable beneficial owners who control the company in another way
Read the people with significant control (PSCs) guidance for more information.
If an obliged entity decides a discrepancy is not reportable, it may be advisable to keep a short record of the rationale for and action taken in the event that a supervisor may request it.
Obliged entities can advise the company to contact us to correct any minor errors.
If the correspondence address is different from the service address on the Companies House register
The address shown for a PSC or a registrable beneficial owner on the Companies House register is a correspondence address, which is also known as a service address. This does not have to be their home address. Obliged entities should take this into consideration when considering whether to submit a report.
PSCs and registrable beneficial owners of an overseas entity must provide their home address to Companies House, but it’s held privately. This information is only available on request to credit reference agencies (unless the details are protected) and specified public authorities.
As their home address is not available on the public register, it might not be a discrepancy if it does not match the address given to an obliged entity. If the address a customer has provided is different to what is shown on the register, you should consider checking with them if they have used an alternative to their home address as a correspondence address.
You should only make a report when there is a material discrepancy between the same types of address.
When to obtain an extract and make a discrepancy report
The Money Laundering Regulations require obliged entities to obtain an extract of the relevant register and to report material discrepancies to Companies House which are identified when:
- setting up a new business relationship with a customer
- carrying out ongoing due diligence checks throughout the business relationship, in line with the Money Laundering Regulations
Setting up a new business relationship with a customer
Obliged entities are required to obtain an extract of the register before establishing a new business relationship with a company or registerable overseas entity customer.
When fulfilling its obligations related to any identified material discrepancies under the Money Laundering Regulations, the obliged entity should seek advice from your supervisory body and applicable industry guidance in its decision to enter the business relationship, its customer risk assessment, and its approach to monitoring.
Ongoing due diligence
When carrying out ongoing due diligence in line with the Money Laundering Regulations, obliged entities are required to carry out ongoing monitoring of a business relationship and report any material discrepancies they identify to Companies House.
You should seek advice from your supervisory body and applicable industry guidance on when and how to conduct ongoing due diligence as required by the Money Laundering Regulations. Companies House will not be able to advise on the specific requirements for individual obliged entities.
You should take a risk-based approach to when you check PSC or registrable beneficial owner information on the register as part of ongoing due diligence, informed by applicable guidance. You may want to check the PSC’s or registrable beneficial owner’s information on the register for material discrepancies when:
- a company has told you that their PSC or registrable beneficial owner details have changed
- you have information, intelligence or suspicion that PSC or registrable beneficial owner information has changed
- conducting enhanced due diligence checks on beneficial ownership, under regulation 33 of the Money Laundering Regulations
This is subject to any guidance that may be provided by your supervisory body.
You should also consider taking a risk-based approach when determining when to check PSC or registrable beneficial owner information on the register as part of ongoing due diligence. This will be a decision for you to make. This is subject to any guidance that may be provided by your supervisory body.
Each and every interaction with a customer has the potential to change that customer’s risk profile. Most will not change the risk profile, but you should consider whether it does.
If it does, you should consider if the change is a material risk change. If it is, you should consider refreshing your overall understanding of the customer and compare your understanding against the public register.
Onboarding an overseas entity
There may be no apparent need to check the Register of Overseas Entities when onboarding a new client that is an overseas entity. You should check if:
- you are engaged with the entity in a land transaction
- you have evidence that suggests the entity owns land in the UK
You may wish to consider checking on a risk-based approach if:
- you are undertaking enhanced due diligence on an overseas entity client
- the overseas entity is incorporated in a high-risk jurisdiction
- the risk assessment you undertake indicates that there may be a reason to check the Register of Overseas Entities
You should report any material discrepancies as soon as they are identified.
Bulk reporting is not allowed. Obliged entities must not wait to make reports in bulk, as this means the register will not be up to date.
If you decide not to make a report, it may be advisable to keep a short record of the action taken in the event that a supervisor may request it.
Make a discrepancy report
From 1 April 2023, you can only use this service to report a material discrepancy. A material discrepancy is one that could reasonably be considered to be linked to one or more of the following:
- money laundering
- terrorist financing
- concealing details of the business of the customer
This is because of an amendment to the regulations. Find out more information about the amendment and what a material discrepancy is.
To report a discrepancy, you’ll need:
- to tell us what the material discrepancy you are reporting relates to - money laundering, terrorist financing or concealment (or a combination of these)
- the company number or Overseas Entity ID of the company or entity being reported as having a discrepancy
- the type of material discrepancy
- the information on the register you believe is incorrect - for example, an incorrect address or an error in the nature of control
- the information that you believe it should be shown on the register
- any other relevant information about the material discrepancy that supports the report
If you need to report a discrepancy about multiple PSCs or registrable beneficial owners, you must submit a new report for each one.
Reporting a discrepancy usually takes up to 10 minutes. The service will time out if you do not use it for 30 minutes and you cannot save your answers.
After you submit the report
We will take appropriate action to investigate and if necessary, resolve or remove the discrepancy. We cannot say how long it will take because each case is different. We will not tell the company or overseas entity who reported the discrepancy or provide updates on any action we are taking.
If you have a question about reporting a discrepancy, you can contact us.
- Telephone number: 0303 1234 500
- Monday to Friday, 8:30am to 6pm
- PSC discrepancies: email@example.com
- Registrable beneficial owner discrepancies: firstname.lastname@example.org
Reporting a PSC or registrable beneficial owner who has their details protected
If one or more PSC or registrable beneficial owner has their details protected, you will not be able to use this service to report a discrepancy. Contact us by telephone on 0303 1234 500 if you need to report a discrepancy about someone who has their details protected.
What personal information (or ‘data’) we collect
- the name of the obliged entity (if an individual)
- the email address of the obliged entity (if an individual)
- the name of the PSC or registrable beneficial owner reported as having a discrepancy
- the date of birth of the PSC or registrable beneficial owner reported as having a discrepancy
- the nationality of the PSC or registrable beneficial owner reported as having a discrepancy
- the postal address of the PSC or registrable beneficial owner reported as having a discrepancy
- any other personal information voluntarily provided by the person submitting the report
How we use personal information
Personal information provided by the obliged entity is compared with the relevant information on the public register. If necessary, the information on the public register will be corrected and annotated.
The obliged entity’s personal information will be used to contact them for more information if needed. The information will be stored on the internal Companies House database along with the associated discrepancy report.
The personal information of the obliged entity and the PSC or registrable beneficial owner identified in the discrepancy report will not be made available to the public, although the information may already be on the public register for filing purposes.
Where the information will be stored
The information will be held on the Companies House database, but not on the public register.
How long personal information is stored
Companies House will hold the personal information of the obliged entity and PSC or registrable beneficial owner in the discrepancy report on the Companies House database for 10 years.
Legal basis for the use of personal information
Companies House has a legal obligation to collect this information.
The GDPR provides certain rights that people may carry out regarding their own personal information. If you want to exercise any of these rights, please contact the Data Protection Officer (DPO).
If you have a complaint about the way we’re managing your personal information, you can let us know firstly by writing to the DPO at email@example.com.
If you’re still not satisfied, you can raise your concerns with:
The Information Commissioner’s Office
Water Lane Wilmslow