Corporate report

Companies House annual report 2014/15

Updated 20 July 2015

This document contains the Companies House annual report for 2014/15. The accompanying accounts can be found with the PDF version.

1. Companies House at a glance

Register size as at 31 March 2015	3,464,155
New incorporations	585,741
Companies restored	5,502
In receivership	9,683
Dissolved companies	369,526
In dissolution	179,831
In liquidation	80,627
Digital take-up	81.6%
Accepted transactions	9,015,215
Paper documents accepted	1,661,000
Accounts compliance	99.1%
Customer satisfaction	89%
How many times the register is accessed for free information	291,481,647
How many times the register is accessed for paid information	6,333,965
Staff engagement	64%
Headcount (Total employees) as at 31 March 2015	870
Headcount (Full-time equivalents) as at 31 March 2015	794.3
Income	£67.5m
Expenditure (including dividend)	£65.4m

More information can be found on our statistics page.

2. Chairman’s Statement

In 1844 the Joint Stock Companies Act made company incorporation straightforward. At the same time it required company details be recorded in a register open to public inspection. In return for the privilege of incorporation, society demanded to know what risks it was running, it demanded corporate transparency. This became critically important following the Limited Liability Act of 1855. By allowing shareholders to cap their risks, limited liability then and now, encourages established companies to invest and innovate and individuals to set up new businesses.

Over 3.4m companies were on the register at Companies House at the end of last year, an increase of 213,830 on the previous year. Without limited liability, most of the companies, large and small, which power the UK economy would not exist. However, allowing shareholders to cap their risks in practice means passing some risks to others. In a dynamic economy not all companies can be winners. Limited liability means that failing companies’ losses can pass on to their suppliers, employees, customers, banks and to the taxpayer, rather than shareholders. Limited liability makes us all stakeholders in British business.

For most of the last 170 years Companies House has published the information that companies are legally obliged to disclose by processing mountains of paper. Now most of the information we receive is digital. Indeed last year 99% of companies filed at least one set of data with us digitally. This in turn has allowed us yet again to reduce our unit costs, already among the lowest in the world. It also allows us to press ahead with the commitment in our strategic plan to make all the digital information we receive from companies available to others without charge. This information will shortly extend to include aspects of the beneficial ownership of companies: under the Small Business Enterprise and Employment (SBEE) Act 2015, information will be made public on ‘people with significant control’.

Although much of our attention in 2014/15 inevitably focused on the changes ahead, I am pleased to report another year in which our services have been provided to more companies, more efficiently than ever before. The Chief Executive and his team have successfully faced the triple challenges of improving existing services, implementing our strategic plan and preparing for the most far reaching legislative changes in a decade. They have the board’s deep appreciation.

Brian Landers

Chairman of Companies House

3. Chief Executive’s Review

2014/15 was the first year of our exciting 5 year strategic plan and we focused our activities and made progress around the plan’s five themes of:

• digital transformation
• open data
• improved register integrity
• reducing burdens
• improving performance and efficiency

There are more limited companies in the UK than ever before, with 585,741 new companies registered during the year and over 98% of these formed digitally. Overall, we achieved new record levels of digital take up and record levels of digital data accessed by customers all over the world. We launched two new digital services, which form the platform for the future of filing and access to the register, and will provide the mechanism to make all our data available for free in 2015. We also achieved record levels of compliance and our new integrity team was successful in helping companies provide up-to-date information and meet their statutory obligations.

As we focused on delivering better services to our customers, and our independent research recorded our highest level of customer satisfaction, we have made real progress in working across government to present customers with more joined up services. This includes moving our website to GOV.UK and developing our combined accounts filing service with HMRC, to working with the Department of Business, Innovation and Skills (BIS) on the new legislation and with the Insolvency Service and other agencies to deliver effective enforcement.

We have continued our record of delivering year-on-year performance and efficiency improvements. However, during the year there were a couple of events that highlighted the importance of delivering to the right standards. One was a serious system outage where we were unable to process transactions for 2 days. The second was a High Court judgment on a registration error made back in 2009; this highlighted the importance of what we do and raised some fundamental legal questions about the register and the quality of our processes. We have put in place a number of actions to improve our performance in both of these areas.

Overall we have achieved a number of great results through the dedication and hard work of our staff and I am very grateful to them for helping us make good progress this year in delivering some key milestones towards our strategy.

We have continued to play an active role with registers across the world. We hold the Presidency of the Corporate Registers Forum (CRF) and are an executive member of the European Commerce Registers Forum (ECRF). We were successful in developing greater collaboration between these two organisations and the two associations that represent registries across the Americas — this has led to the development of a truly worldwide registry benchmarking survey providing a rich vein of company information to compare and help registries improve. The UK is seen as leading the way in transparency and open data but it is clear that others are moving faster in offering joined up services across government to companies.

Our strategy was based on a set of assumptions and plans; after one year, it is right that we review those assumptions. Our overall workload is higher than originally forecast and we now have further information on the additional work the Small Business Enterprise and Employment Act 2015 and other legislative changes will bring over the next two years. It is clear that the scale and scope of the changes that the Act brings are bigger than we first thought. We have therefore revised our development plans for the next couple of years and the focus for 2015/16 will be to ensure that our existing services are ready for the new legal requirements, which began taking effect from May 2015. We have put on hold, for the next year, some of our restructuring work so that we can focus on preparing our systems, training our staff and helping our customers through these changes.

The past year has seen us make good progress towards our goals and laid the platform for some significant changes in 2015 and 2016. These will see us provide free digital data for all, implement some of the most significant changes to corporate transparency for a generation and put us at the heart of digital government.

Tim Moss

Chief Executive and Registrar

24 June 2015

4. Strategic Report

4.1 Background

Introduction

Companies House is an executive agency. As a Trading Fund, we receive no taxpayer funding. Our income primarily consists of fees for registration, data and search activities. In addition, we receive income from the rental of surplus office space. Penalties collected in respect of company accounts filed late with Companies House are paid in their entirety to HM Treasury. The running costs that we incur in the charging, administration and collection of late filing penalties on behalf of HM Treasury are recovered by us from BIS.

We operate under UK legislation including the Companies Act. The accounts have been prepared in accordance with a direction by the Treasury in pursuance of section 4(6) of the Government Trading Funds Act 1973.

Principal Activities

Companies House incorporates and dissolves limited companies, registers the information they supply, and makes that information available to the public. We also have delegated responsibility to administer the late filing penalty regime on behalf of the Secretary of State.

Companies House has a head office in Cardiff and smaller offices in Edinburgh, Belfast and London. Company registrations for England and Wales are carried out in Cardiff, while registrations for Scotland and Northern Ireland are processed in Edinburgh and Belfast, respectively.

Our key priorities, as detailed in our 2014 to 2019 strategy, are summarised below:

• digital transformation towards becoming a 100% digital organisation
• open data with links to other government information on companies
• improved register integrity through better investigation and remedies
• reduced burdens through deregulation and joining up across government
• efficiencies ensuring fees will not increase

Forecast

The growth in new company registrations far exceeded last year; with 585,741 new incorporations compared with 533,032 last year. With 369,526 dissolutions, the net increase in the size of the register was 6.6%, meaning there were more than 3.4m companies on the register at the end of the year.

Increasing digitisation and other efficiencies allowed us to cope with the extra work whilst continuing to reduce both headcount and our unit cost. Headcount at year end reduced to 794 full-time equivalents (FTE), whilst our average cost per company fell by 8%.

Although the proportion of transactions submitted digitally increased to 81.6%, the increased register size meant that we still processed 1.7m paper documents.

The overall financial result of the higher than expected increase in register size and our own efficiency measures was that we produced a surplus of £2.1m.

4.2 Digital transformation

Our aim is to become as close as possible to a 100% digital organisation by the end of 2018/19. With 99% of companies filing at least one transaction with us digitally we have reached a critical stage on our journey.

Our strategy sets out our plans to develop a new digital service to replace the existing filing and search systems; to provide digital options for transactions that can only be submitted on paper and increase the take-up of our digital services to as near 100% as possible. This will enable us to reduce the number and amount of fees we charge.

The key benefits to our customers include:

• reduced burden for companies, moving away from a form filling approach to one based on checking information
• faster availability and access to company information
• open access to data
• improved efficiency, reduced cost
• increased trust and transparency, with ‘many eyes’ checking the data provided by companies
• improved processing accuracy, with system driven validation and less risk of human error

The development of the new Companies House digital service has been a key focus this year and we launched it in June to 5,000 customers for testing. The service allows easy access to a company profile page, including the basic information for free, and the ability to file a change of registered address. It has received positive customer feedback and passed our Government Digital Service (GDS) assessment.

Companies House has been at the forefront of the digitalisation of government services. Mike Bracken, Executive Director of Digital in the Cabinet Office, and head of GDS, described Companies House in his blog as:

A model for a digital department or agency. In nearly every part of their operation, they’re ahead of the curve.

A record number of searches were conducted online during the year, with the vast majority of them free. In June, we announced that we would make all our digital information available free to customers and the development of our new service provides the platform to do this.

We have also increased the number of documents customers file with us digitally. We have worked with key stakeholder groups to improve awareness of existing services, for example, the ability to file charges digitally. For some key transactions, such as annual returns, micro accounts and incorporations, 99% were submitted digitally.

Our online services were available for 99.9% of the time during the year. Whilst we have improved the quality of our services, we still have work to do to minimise the impact of internal system downtime. In August 2014, we had a period where our main database was unexpectedly unavailable, meaning that we could not process paper and digital documents for 2 days. However, our online services continued to satisfy searches and allowed electronic filings to be queued for later processing. We have taken a number of steps to improve our resilience and recovery times. We have invested in the core technology, by installing new, faster database servers and we have engaged third party expertise to conduct a full review of our business continuity arrangements.

To make our services better and easier for our customers to use we have invested significantly in digital development and IT capacity. We will continue to invest in our digital transformation in 2015/16, in particular with the new digital service and Application Programming Interface (API), which allows third parties, including software developers, to produce their own systems to interact with the register.

The Companies House website moved to GOV.UK on time, in line with the government’s requirements.

4.3 Open data

The data on the register is a fundamental part of the core national information infrastructure that underpins daily economic activity. Making the information freely available will encourage new users and innovation. Further digital enablement will mean more information will be accessible as open data.

Companies House has made all of our digital information freely available to customers. Our new platform provides for a step change in open data. This makes all public information on the register easier to access through the improved digital channels we are developing, including our bulk services, free of charge. This includes:

• basic company data
• accounts information
• appointments and charges
• information about other events in a company’s life
• digital images

We will continue to replace the existing systems (WebFiling, WebCHeck and Companies House Direct) with the new service. We will also carry on charging for non-digital services, such as certificates and our on-demand service to convert documents held on microfiche to digital formats, whilst we explore digital solutions for these services.

During 2014/15 we won the 2014 XBRL (eXtensible Business Reporting Language) International Project Excellence Award for Innovation in XBRL and Open Data, for our contribution to the success of the XBRL standard.

A key benefit in having an open, and up to date, register means that it has ‘many eyes’ checking the information submitted by companies. The more open the data is, and the more it is viewed, trust and transparency will increase, as more people will be highlighting and challenging inaccuracies and inconsistencies.

4.4 Register integrity

The strategic plan sets out our aim to deliver further improvements in the quality and integrity of the information provided by companies held on the register — ensuring that the register continues to be a trusted source of complete, up to date, and correct information.

Companies are responsible for keeping their information up to date and accurate, so a key principle in our integrity strategy is to help and guide companies to understand their requirements. We do this by providing guidance, issuing reminders and running awareness seminars for new directors. The results are evident in our highest ever compliance rates this year; 98% of annual return and 99% of accounts filed.

Where encouragement doesn’t work we will take appropriate action. This year we have issued £84.5m penalties for the late filing of accounts. In addition, we prosecuted over 2,000 directors for failure to file an annual return or accounts. However, the aim is to get directors to file on time so that penalties or prosecution action is not necessary.

Improving the quality of the data on the Register is a key priority for Companies House. During 2014/15 we invested in this area and established a dedicated team of people to strengthen the integrity of the register through better scrutiny of company information held and improvements across a number of areas of lower compliance. For example, we worked with FTSE 350 companies in cases of non-disclosure of subsidiary undertakings achieving 100% compliance by December 2014 and at the end of March 2015.

We joined the Government Agency Intelligence Network (GAIN) and provide data to assist investigations; we have also established links with the National Crime Agency (NCA) and regularly share data. This work will help to build greater confidence and trust in company data. From October 2015, we will be writing to every new director to improve the awareness of their statutory responsibilities.

4.5 Reduced burdens

Our strategic aim is to reduce burdens on business by supporting deregulation and joining up across government. A combination of better services and new legislation means we are making life easier for our customers to interact with us.

We have worked with other government departments on implementing a range of legislative measures to both improve the data held on the register and further reduce burdens on business.

In parallel, Companies House also develops its services to ensure that they are quick and easy to use.

During 2014/15 we have:

• designed the new Companies House digital service, making it quicker and easier for companies to file and access information
• implemented changes simplifying the company names regime giving companies more choice in the names they register, and reducing the complexity of choosing a company name
• reduced the burden of filing accounts to both Companies House and HMRC through the development of a digital service for a single point of filing. We will now extend the reach of this service to a wider audience.

Further simplification is to be implemented in 2015/16, which was prepared in 2014/15:

• work has begun on the deregulatory measures introduced through the SBEE Act 2015, including a new process for resolving disputes regarding registered offices from October 2015
• we have worked with HMRC and BIS to plan a new, streamlined company registration system that will come into effect in 2017. This will enable all information needed to incorporate a company, register for VAT, Corporation Tax and PAYE to be delivered digitally to a single place

4.6 Efficiency

Our strategic plan sets out a range of efficiency measures, including reducing headcount, a freeze in registration fees and significant reductions in the average cost per company of the register.

Despite a challenging year in terms of increasing workload, significant efficiency gains have been achieved:

• the operating cost per company has fallen by 8% this year
• we have delivered the equivalent of £3m in efficiencies, including significant savings from new print, mail and finance systems contracts

Although electronic take-up and efficiency plans are on track, register growth is significantly higher than forecast, as is the resource required to prepare for and implement the new legislative measures.

4.7 Our people

As part of our strategic journey, moving from paper based processes to become a 100% digital organisation, we will inevitably be a smaller organisation with fewer people who will require different skills.

During the year we have concentrated on ensuring that we have the right structure and roles best suited to a customer focussed digital services organisation with agile, innovative and empowered staff.

Investors in People

To help achieve our goals, we use the Investors in People (IiP) framework to assist us, and at our IiP assessment, we were proud to achieve the Gold Standard, highlighting the continued excellence in clear leadership, communication and continuous improvement. Our staff engagement levels remained stable (placing Companies House in the highest quartile of public sector bodies) reinforcing the work that we do to ensure that staff understand how they contribute to the overall delivery of the organisation’s objectives.

Voluntary exit scheme

The makeup of our staff group has also started to alter, reflecting our digital focus. During the year we ran a voluntary exit scheme and 90 (73 FTE) staff left us.

External recruitment

We have recruited 19 external new staff to our Digital Services directorate, bolstering our capacity to deliver our digital agenda.

Attendance and performance

Attendance and performance management have been, and remain, priority areas as we drive up standards. Culturally staff understand the organisation’s expectations and they are rewarded with a modern working environment and investment in their future through learning and skills development.

Breakdown by gender

At the end of the financial year there are 1 female and 3 male executive directors, including the Chief Executive Officer. Organisation wide there were 481 female and 389 male employees.

Corporate social responsibility

Companies House continues to focus on corporate social responsibility, ensuring we behave ethically, which has had a positive impact on business, society and staff. During the reporting year staff undertook 247 volunteering days with local charities. Staff were also keen to get involved in many fundraising activities, and raised over £8,000 for a number of national and local charities.

Trade union: working in partnership

We continue to work constructively with our trade union colleagues who are fully engaged on delivering our strategic aims.

4.8 Financial performance

This year we saw a continuation of our strong track record in driving down costs and investing in improving services to customers.

Total income was £67.5m. This exceeded the planned amount by £1.5m, reflecting the continued growth in the register arising from record levels of incorporations and the further improvements in our compliance effort. Income from search products continued to grow, even though some new free data products were available.

Costs, at £61.1m, were £1m less than budget. These were reduced through earlier than planned voluntary staff exits and improved contracts for goods and services. Other efficiencies included improvements to internal systems and processes and absorbing new work.

As a result, there was a net operating surplus before dividend of £6.5m. The net operating surplus was £2.1m after payment of the dividend of £4.4m.

£5.8m was invested in improving systems and developing new services for customers, and improvements to the working environment.

Of this, in-house development costs accounted for £3.9m. This both enhanced the main Companies House operational software (Companies House Information Processing System) and also completed the first major phase of the new Companies House digital service in preparation for full product launch early in the next financial year. We invested £1.8m in further hardware and upgrades, and £0.1m on improvements to the working environment.

We have a target to achieve a return, averaged over the period as a whole, of at least 3.5% surplus on ordinary activities after interest and before dividends payable, as a percentage of average capital employed, for the five years from 1st April 2014 to 31st March 2019. We have achieved an average return of 8.6%.

Our balance sheet remains strong and we have improved our cash balances by £4.1m to £41.4m. This will fund our future capital investment, as well as enable further restructuring to take place. The independent valuation of the freehold land and buildings at Crown Way, Cardiff as at the end of this financial year, valued the asset at £17.5m. More information on this is provided in note 5a of the accounts.

Provision has been made for the legal costs relating to the major court case mentioned in the Chief Executive’s Review.

No award for damages has yet been made. Further information is included in the contingent liability note (note 24) to the accounts. Any award will therefore impact on our costs and balance sheet in the future.

Late Filing Penalties

There is a separate trust statement for the Late Filing Penalties (LFP) regime. The cost of operating the scheme in 2014/15 was £5.2m compared to a budget of £5.6m, and £56.5m in penalties collected was paid into the HM Treasury’s Consolidated Fund.

Key performance indicators and public targets

Of our 17 public targets; we have met 11. We have exceeded our targets for accounts and annual return compliance rates and availability of our filing services. We have marginally missed 6; average number of work days lost by 0.1 days, electronic images available within 48hrs by 0.4% and the average electronic filing target for accounts by 3.8%. The most notable is the target to provide access to download document images within 35 seconds where we achieved 94.3% instead of 98%. However, developments of our new service will provide faster viewing times.

Customer

Public targets	Out-turn
Companies House Direct services are available 99.7% of the time	99.9%
WebCHeck services are available 99.7% of the time	99.9%
WebFiling services are available 99.7% of the time	99.9%
Software filing services are available 99.9% of the time	99.9%
98% of document images ordered by search customers are available within the Companies House Direct download area within 35 seconds	94.3%
Achieve an overall satisfaction score of more than 88% in the Companies House satisfaction Survey conducted by Ipsos Mori by end November 2014	89%
To achieve a monthly soft compliance rate of 99% for accounts submitted to Companies House	99.1%
To achieve a monthly soft compliance rate of 98% for annual returns submitted to Companies House	98.3%
CEO to respond to all letters delegated to him from MPs within 10 working days of receipt	100%
Resolve 99% of customer complaints by 5 days	99.2%

Digitisation

Public targets	Out-turn
To achieve an average electronic filing target of 70% for accounts (received and accepted) by the end of the year	66.2%
To achieve an average electronic filing target of 87.5% for all transactions (excluding accounts) by the end of the year	87.5%

Staff engagement

Public target	Out-turn
Ensure that the average working days lost per person is no more than 7.5 days	7.6

Process

Public targets	Out-turn
To reduce carbon created from utilities by 10% per building user, at Crown Way (compared with previous year) by end of March 2015	11%
99.9% of electronic transactions received are available to view on the public record (image format) within 48 hours	99.5%
99.8% of electronic images on Companies House systems are complete and legible	99.7%
99.8% of paper images on Companies House systems are complete and legible	99.1%

Finance

Key performance indicators	Out-turn
95% of all undisputed invoices are paid within 5 days of receipt	98.6%
Taking one year with another, to achieve a 3.5% average rate of return based on the operating surplus expressed as a percentage of average net assets	8.6%
Achieve by 2016/17 a reduction, in real terms, of 25% compared to 2013/14 in the operational monetary cost of the operation’s organisational costs (3 year target)	see note 21b of the accounts

4.9 Sustainability report

Greenhouse gas emissions: non-financial indicators

Scope/emission/energy use	2012/13	2013/14	2014/15
	tCO2e	tCO2e	tCO2e
Total Scope 2 emissions (off site electricity generation)	1,695	1,644	1,785
Total Scope 3 emissions (transmission loss of electricity)	134	141	153
Total emissions attributed to electricity consumption	1,829	1,785	1,938
Total Scope 1 emissions (gas, fuel for fleet, fugitive emissions)	75	82	70
Emissions attributable to Scope 3 official business travel (rail, taxi, air, underground)	61	91	64
Total emissions (all scopes)	1,965	1,958	2,072

Greenhouse gas emissions: related energy consumption

Scope/emission/energy use	2012/13	2013/14	2014/15
	kWh’000	kWh’000	kWh’000
Electricity ‘green tariff’	3,685	3,691	4,007
Gas	392	405	344
Total kWh consumption	4,077	4,096	4,351

Greenhouse gas emissions: financial indicators

Scope/emission/energy use	2012/13	2013/14	2014/15
	£’000	£’000	£’000
Expenditure on energy (gas, electricity)	421	473	517
Expenditure on CRC (including fees and allowances)	26	31[footnote 1]	27
Expenditure on official business travel (rail, hire cars, taxis, air and fuel)	160	211	223

Waste

Non-financial indicators	2012/13	2013/1	2014/15
	(tonnes)	(tonnes)	(tonnes)
Recycled/reused	237	210	173
ICT waste	2	5	2
Landfill	75	71	68

Financial implications	2012/13	2013/14	2014/15
	(£’000)	(£’000)	(£’000)
Total disposal cost	19	9	9

Use of finite resources (water)

Non-financial indicators	2012/13	2013/14	2014/15
	(m3)	(m3)	(m3)
Water consumption	- [footnote 2]	10,111	9,483

Financial implications	2012/13	2013/14	2014/15
	(£’000)	(£’000)	(£’000)
Water supply costs	34	39	34

Sustainability facts for 2014/15

Companies House was again successful in maintaining certification of the International Environmental Standard ISO14001, demonstrating our continued performance in this area.

We reduced our display energy certificate operational rating by 3% (C rating) at our Cardiff office, providing a visual indication of how efficiently we operate our building. Our rating is 43% better than good practice.

During the year we have improved the efficiency of our building by creating space for other government organisations to rent our office and storage space. Naturally, this has meant an increase in our overall electricity consumption, however, our energy per building user has reduced. We have also:

• launched a successful cycle to work scheme to encourage our employees to cycle to the workplace
• provided a priority car parking area to all car sharers at our Cardiff office, helping to reduce emissions and local traffic congestion

At our Cardiff office we have rented 7,509m2 of office and storage space to other government departments. This has provided a rental and service charge income of £964k for the financial year. This collaborative approach will contribute to the government’s wider estate strategy of operating government estate buildings as efficiently as possible.

We want to create a working environment that encourages innovation and creativity, as well as delivering the wider government building efficiency measures. During the year we have developed a proposal to create a collaborative work space for our employees and visitors. We have also started to introduce improved meeting room facilities which reflect our business needs.

The health, safety and wellbeing of our staff, tenants, customers and visitors to Companies House continues to remain a priority. In demonstrating this commitment, we were again successful in achieving the ISO 18001 Health and Safety Standard.

4.10 Principal risks and uncertainties

Risk management activity remains focused on identifying and effectively managing risks to ensure minimum impact on the delivery of our strategic plan and delivering legislative change, whilst maintaining our ability to protect the integrity of our data and meet customer service targets. Details of the risks identified and addressed in 2014/15 are outlined in the Governance Statement within the accounts.

There are a number of risks that we will carry into the new financial year. Whilst they are being controlled, either they have yet to be managed down sufficiently or are of an ongoing nature and require continued vigilance.

These include:

• infrastructure and applications resilience
• our capacity to deliver legislative change whilst ensuring customer satisfaction is upheld as well as progress against our strategy
• a High Court judgment on a registration error made back in 2009 has raised some fundamental legal questions about the register and highlighted the importance of what we do and the quality of our processes. We have put in place a number of actions to improve our performance in both of these areas.

Tim Moss

Chief Executive and Registrar

24 June 2015

5. Directors’ Report

5.1 Purpose of the Directors’ Report

This report is presented as required by the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations.

5.2 Members of the Board

Brian Landers: Chairman of Companies House

Brian Landers was appointed as the chairman of Companies House on 1 August 2012. Brian is a member of the Competition Appeal Tribunal. He was previously an audit commissioner, deputy chairman of the Financial Ombudsman Service, a trustee of the Royal Armouries and treasurer of the UK section of Amnesty International. He has extensive private sector board experience in the UK and overseas. He has held financial, operational and general management positions in insurance, manufacturing, management consulting, retail and most recently publishing, working for such household names as Sainsbury’s, W H Smith and Penguin Books. In addition he was the first finance director of the Prison Service. He has an MBA from London Business School.

Tim Moss: Chief Executive Officer and Registrar of Companies for England and Wales

Tim became the Registrar in March 2012 and is the 31st Registrar of Companies in a long line that first started back in 1844. Tim joined Companies House in 2002 and spent the first two years running the operations and compliance departments before moving into the role of Director of Corporate Strategy. During his career at Companies House he has been heavily involved in leading digital transformation, the move to open data, major legislative changes, business strategy, and developing cross government services. Before joining Companies House he spent 12 years in senior operational roles in the manufacturing industry. He has a natural sciences degree from Cambridge University, an MBA from Swansea University and lives on a farm in south Wales.

Anne Spinali: Non-executive Board Member (BIS)

Anne joined the Shareholder Executive (part of BIS) as an executive director in October 2013 and is BIS’ lead sponsor for Companies House. Previously she was head of SME Debt Finance Strategy in BIS, where she led work on establishing a Business Bank and allocating the £100m Business Finance Partnership Investment Programme and on small business finance policies. Before joining BIS, she worked at the Confederation of British Industry and in the charity sector on a range of public policy issues as well as in the European Parliament.

Ann Lewis: Director of Operations and Customer Delivery

Ann joined Companies House in July 2009 and is responsible for the Customer Delivery Directorate including Customer Service, Operations and Enforcement. Since joining Companies House, Ann has led the delivery of major successes and continues to drive forward process improvements and change beneficial to the organisation with enthusiasm, determination and engaging staff at all levels.

Prior to joining Companies House, Ann was a deputy director within the Office for National Statistics (ONS) based in Newport. Ann spent over 30 years at the ONS covering a variety of roles with a great deal of experience and success introducing and managing major business-change strategies. Ann has managed various large teams delivering complex portfolios, specialising in operational management and driving forward business change and efficiencies.

Gareth Lloyd: Director of Digital Services

Gareth joined Companies House in 2014 and is responsible for leading the digital transformation of the organisation, with a particular focus on digital by default, open data, and digital skills. As Chief Digital Officer and Senior Information Risk Owner, he manages the software engineering, IT Services, Product and Digital Marketing teams. Gareth has held digital leadership roles in blue chip businesses in the UK and Australia, as Chief Information Officer and Chief Operating Officer. In addition, he is a non-executive director of Curo Group, a progressive social housing organisation in the south west of England. In his earlier career, Gareth was a director at Deloitte in London and Sydney. He is a chartered accountant, with post-graduate qualifications in Law, Strategy and Innovation.

Jeff Lynn: Non-executive Board Member (NEBM)

Jeff Lynn became a NEBM in March 2013. He is Chief Executive Officer and co-founder of Seedrs, one of the world’s leading equity crowdfunding platforms. He was also founding chairman of the Coalition for a Digital Economy (Coadec), which advocates on behalf of digital startups and small and medium-sized enterprises on policy and regulatory issues. Jeff began his career practicing corporate law with Sullivan & Cromwell LLP in New York and London.

Mike Taylor: Non-executive Board Member

Mike has a MA (Hons) in Economics from Cambridge University. His professional career started in the City where he was a research analyst. Mike rose to Director level and headed the media research team at Credit Suisse First Boston. He was ranked highly within the leading internal and external polls and was involved in a number of high profile capital raising exercises for companies such as BSkyB, Granada Media and Thomson Corporation. Mike left the city in 2003 and founded Innovise Ltd. As founder CEO, Mike has led the buy-and-build growth of Innovise that has been recognised for its rapid growth in the IT market as a three times Deloitte Fast 50 Winner (2010, 2011, 2012) and a two times Sunday Times Tech Track Winner (2011, 2012). Mike lives in Surrey with his wife and two daughters.

Neil Hartley: Director of Strategy and Corporate Services (Now Director of Finance)

Neil joined Companies House in 2012. Since April 2015, he has also worked at the Intellectual Property Office, another BIS trading fund, in an innovative arrangement where the finance director role is shared. Neil has had a varied public sector career including lead finance and change programme roles at the Infrastructure Planning Commission and the Government Office for the Regions. Earlier posts included HMRC, energy regulation and the planning inspectorate. Neil is a Chartered Institute of Public Finance and Accountancy (CIPFA) qualified accountant, and holds a Post-Graduate Diploma in Public Finance & Leadership from Warwick Business School.

Peter Wyman: Non-executive Board Member (NEBM) and Chair of Audit Committee

Peter Wyman has a portfolio of appointments in the private, public and third sectors including being chairman of Yeovil District Hospital NHS Foundation Trust, chairman of Sir Richard Sutton Estates Limited, a senior advisor to Albright Stonebridge Group LLC, chairman of Somerset Community Foundation and treasurer of the University of Bath. Previously Peter was a partner in PricewaterhouseCoopers LLP. In 2002/03 Peter was president of the Institute of Chartered Accountants in England and Wales and was chairman of the Consultative Committee of Accountancy Bodies. He was awarded a CBE in the Queen’s Birthday Honours in 2006 for services to the accountancy profession.

Sheila Doyle: Non-executive Board Member

Sheila has extensive experience in business, in particular specialising in IT management, strategic alignment and complex programme delivery. She has held senior positions, operating at board level with blue-chip companies including BP, IBM, and Deutsche Bank. She consulted to financial and manufacturing firms in Asia Pacific having spent a number of years in Hong Kong, Singapore and Australia. More recently, Sheila has focused on delivering customer-facing solutions and leveraging technology in the digital age. Sheila completed her PhD in Australia before returning to London with her family.

5.3 Pension liabilities

Employees are covered by the provisions of the Principal Civil Service Pension Scheme (PCSPS). Further information on the treatment of pension liabilities is included in the accounting policies (note 1k of the accounts) and in the Remuneration Report.

5.4 Employees

We are committed to being a responsible business and to support the people that work with us and the communities in which we work. All employees have equal access to training, career development and promotional opportunities, with reasonable adjustments being made. We continue with the Job Centre Plus 2 Ticks scheme and our guaranteed interview scheme means that all disabled people who meet the minimum requirements of a job vacancy, are interviewed and considered on their abilities.

We continue to promote a proactive approach to managing long term health issues with individuals, with the aim of sustaining them within, or facilitating their return to work. This incorporates provision of a comprehensive occupational health support function, including access to an occupational health provider and Employee Assistance Programme, tailored case conferencing and robust support for the implementation of reasonable adjustments to aid the individual.

We use various methods of corporate and local communication to advise employees of issues which affect them. These include business plan presentation sessions, digital forms of communication such as the intranet site, digital screens, face to face discussions and awareness sessions. The sickness absence data measure is shown in section 4.9 of the Strategic Report.

5.5 Personal data related incidents

During the reporting year there have been no security incidents that have warranted formal reporting to the Information Commissioner’s Office. However there have been the following minor incidents: 22 unauthorised disclosures; 7 application / IT security incidents and 2 others.

5.6 Future developments

Our future developments are set out throughout the Strategic Report.

5.7 Political and charitable gifts

There were no gifts of a political or charitable nature made during the year.

5.8 Audit service

The statutory external audit was performed by the National Audit Office (NAO) and reported on by the Comptroller and Auditor General at a cost of £36,000 (2013/14: £36,000). An audit was also carried out for the Trust Statement at a cost of £12,000 (2013/14: £12,000). The NAO did not perform any non-audit services.

In the case of each of the persons who are directors at the time the report is approved:

• so far as the director is aware, there is no relevant audit information of which the entity’s auditor is unaware
• the director has taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information, and to establish that the auditor is aware of that information

Tim Moss

Chief Executive and Registrar

24 June 2015

6. Remuneration Report

The remuneration of senior civil servants is set by the Prime Minister following independent advice from the Senior Salaries Review Body.

In reaching its recommendations, the review body has regard to the following considerations:

• the need to recruit, retain and motivate suitably able and qualified people to exercise their different responsibilities
• regional/local variations in labour markets and their effects on the recruitment and retention of staff
• government policies for improving the public services, including the requirement on departments to meet the output targets for the delivery of departmental services
• the funds available to departments as set out in the government’s departmental expenditure limits
• the government’s inflation target

The review body takes account of the evidence it receives about wider economic considerations and the affordability of its recommendations.

Further information about the work of the review body can be found at the Office of Manpower Economics

6.1 Service contracts

Civil Service appointments are made in accordance with the Civil Service Commissioners’ Recruitment Code, which requires appointment to be on merit on the basis of fair and open competition but also includes the circumstances when appointments may otherwise be made. Unless otherwise stated below, the officials covered by this report hold appointments which are open-ended until they reach the normal retiring age. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil-Service Compensation Scheme.

Further information about the work of the Civil Service Commission can be found at the Civil Service Commission.

6.2 Salary

‘Salary’ includes gross salary, overtime, reserved rights to London weighting or London allowances, recruitment and retention allowances, private-office allowances and any other allowance to the extent that it is subject to UK taxation. This report is based on accrued payments made by Companies House and thus recorded in these accounts.

6.3 Benefits in kind

One senior manager received a benefit in kind of £2,271 in 2014/15, this amount is included in the main remuneration table (2013/14: £4,343).

6.4 Performance pay

All staff are eligible to participate in the corporate-efficiency award scheme. The scheme is available to all staff not subject to formal disciplinary letters within the period. Senior civil servants’ performance pay is determined by the senior pay committee of the Department for Business, Innovation and Skills.

Performance-related awards are assessed annually by the Remuneration Committee. The one-off payments are determined by individual performance and criteria associated with Companies House’s performance management process and aligned to the policy for public-sector pay.

6.5 Civil service pensions

Pension benefits are provided through the Civil Service pension arrangements. From 30 July 2007, civil servants could join one of four defined benefit schemes; either a final salary scheme (classic, premium or classic plus); or a whole career scheme (nuvos). These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus and nuvos are increased annually in line with Pensions Increase legislation. Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a ‘money purchase’ stakeholder pension with an employer contribution (partnership pension account).

Employee contributions are salary-related and range between 1.5% and 6.85% of pensionable earnings for classic and 3.5% and 8.85% for premium, classic plus and nuvos. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum equivalent to three years initial pension is payable on retirement. For premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike classic, there is no automatic lump sum. Classic plus is essentially a hybrid with benefits for service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 worked out as in premium. In nuvos a member builds up a pension based on their pensionable earnings during their period of scheme membership. At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with Pensions Increase legislation. In all cases members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004.

The partnership pension account is a stakeholder pension arrangement. The employer makes a basic contribution of between 3% and 12.5% (depending on the age of the member) into a stakeholder pension product chosen by the employee from a panel of providers. The employee does not have to contribute, but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.8% of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill health retirement).

The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of classic, premium and classic plus and 65 for members of nuvos.

Further details about the Civil Service pension arrangements can be found on the Civil Service Pensions website

New career average pension arrangements were introduced from 1 April 2015 and the majority of classic, premium, classic plus and nuvos members will join the new scheme. Further details of this new scheme are available here.

6.6 The following tables have been audited

This section provides information on the salary and pension entitlements of the senior managers of Companies House in the year to 31 March 2015.

Senior managers have been defined using the definition of ‘Key management’ contained within the IAS24 Related Party Disclosures. They are the persons having authority and responsibility for planning, directing, and controlling the major activities of the reporting entity.

6.7 Non-executive salary

	2014/15	2013/14
	£’000	£’000
Brian Landers	25-30	25-30
Peter Wyman	10-15	10-15
Sheila Doyle	10-15	10-15
Jeff Lynn	10-15	10-15
Mike Taylor	10-15	10-15
Craig Lester (Resigned January 2014) [footnote 3]	N/A	nil
Anne Spinali (Appointed December 2013) [footnote 3]	nil	nil

6.8 Executive disclosure

Reporting bodies are required to disclose the relationship between the remuneration of the highest paid director in their organisation and the median remuneration of the organisation’s workforce.

The ratio presented here is the total remuneration of the lead executive (taking the mid-point of the range disclosed) and the median full time equivalent remuneration of all other Companies House employees.

Total remuneration includes salary, performance-related pay and benefits-in-kind. It does not include severance payments, employer pension contributions and the cash equivalent transfer value of pensions.

	2014/15	2013/14	% Change
	£’000	£’000
Lead executive remuneration	125-130	120-125	0%
Median remuneration	22	21	3%
Ratio	5.77	5.73 [footnote 4] [footnote 5]	1%

6.9 Cash equivalent transfer values

A cash equivalent transfer value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies.

The figures include the value of any pension benefit in another scheme or arrangement which the member has transferred to the Civil Service pension arrangements. They also include any additional pension benefit accrued to the member as a result of their buying additional pension benefits at their own cost. CETVs are worked out in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.

6.10 Single total figure of remuneration

		Tim Moss	Ann Lewis	Neil Hartley	Gareth Lloyd
2014/15
Salary	£’000	85-90	70-75	75-80	120-125
Performance Payments	£’000	0-5	0-5	0-5	0-5
Benefits in kind (to nearest £100)	£	nil	nil	2,300	nil
Pension benefits	£’000	27	9	12	46
Total remuneration package	£’000	110-115	80-85	90-95	170-175
2013/14
Salary	£’000	80-85	70-75	75-80	10-15  [footnote 6]
Performance Payments	£’000	0-5	10-15	0-5	nil
Benefits in kind (to nearest £100)	£	nil	nil	4,300	nil
Pension benefits	£’000	14 [footnote 9]	102	79[footnote 9]	4
Total remuneration package	£’000	100-105	180-185	155-160 [footnote 9]	15-20
Real increase in pension	£’000	0-2.5	0-2.5	0-2.5	2.5-5
and lump sum at age 60	£’000	2.5-5	0-2.5	nil	nil
Total accrued pension at age 60 at 31/03/15	£’000	15-20	35-40	30-35	0-5
and related lump sum	£’000	45-50	110-115	nil	nil
CETV at 31/03/15	£’000	249	748	403	30
CETV at 31/03/14	£’000	217	707 [footnote 7]	375 [footnote 8]	3
Real increase in CETV funded by employer	£’000	17	7	6	16

The remuneration of the highest paid director in Companies House in the financial year 2014/15 was £125,215 (2013/14: £11,905 actual, £125,000 annualised).

Total remuneration includes salary, non-consolidated performance related pay, benefits-in-kind as well as severance payments.

It does not include employer pension contributions and the cash equivalent transfer value of pensions.

6.11 Real increase in CETV

This reflects the increase in CETV that is funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period.

6.12 Compensation for loss of office

Ninety members of staff left during the year under a voluntary exit scheme. Total compensation payments of £2.8m were made during the year in relation to this scheme. Departure costs have been paid in accordance with the provisions of the Civil Service Compensation Scheme. Further disclosures in relation to the exit scheme are included in note 3(d) to the financial statements.

6.13 Companies House main board

There were 6 independent Non-executive Board Members as at the 31 March 2015.

Tim Moss

Chief Executive and Registrar

24 June 2015

1. Estimated value. ↩

2. Between 2012 and 2013, a fault developed with the water meter at our main headquarters. This fault took a long period of time to identify and rectify. Therefore, it was not possible to provide accurate water consumption data for that financial year. ↩

3. Remuneration is paid by the Department for Business, Innovation and Skills (BIS). ↩ ↩²

4. The 2013/14 ratio has been amended from 5.95 as stated in last year’s accounts to correct a calculation error. ↩

5. The calculation for 2013/14 was based on annualised salary of Gareth Lloyd who joined Companies House on the 25 February 2014. ↩

6. Gareth Lloyd was appointed on 25 February 2014. His annualised salary for 2013/14 would have been £125,000. ↩

7. The prior year pension benefits for Tim Moss and Neil Hartley have been amended to correct an error in the prior year information provided by MyCSP. ↩ ↩² ↩³

8. CETV: The opening figure is different from the closing figure in last year’s accounts of £714,000. This is due to the prior year figure being recalculated by MyCSP to include guaranteed minimum pension (GMP). ↩

9. CETV: The opening figure is different from the closing figure in last year’s accounts of £358,000. This is due to the prior year figure being recalculated by MyCSP to include updated service. ↩