Improvements made to Companies House ? We thought we'd report a suspicious company and find out.

Much has been made of improvements made to the way in which Companies House and HMRC investigate and deal with online tax fraudsters. We thought we'd see just how robust the systems are by reporting a trader who is at the very least not compliant and at worst evading tax.

In August 2025 we identified a business on eBay that had been trading for a number of years whilst filing dormant accounts. We believe over £300k worth of goods has been sold by this seller over the last 4-5 years (just under the VAT threshold each year) and no Corporation Tax appears to have been paid. We first reported them to HMRC via the online portal for potential Corporation Tax abuse and we then emailed Companies House to report that they were submitting dormant declarations whilst trading.  

Not having had a response by the end of August we chased Companies House and were informed by email that we had to contact the Insolvency Service because they apparently deal with companies engaged in fraudulent declarations. This was done and to date we have had no reply.

In early September we received the following reply from Companies House:

"Thank you for your email. I would like to explain that Companies House is essentially a registry of company information, serving as the official source of corporate data in the UK. Our primary role is to collect, store, and make company information publicly accessible to promote corporate transparency. Under the Economic Crime and Corporate Transparency Act 2023, we have been granted limited investigatory powers. These powers enable us to query or challenge information submitted to the register if it is deemed appropriate, or if a complainant provides substantive evidence, that warrants further investigation which in some instances will mean we write to the company asking for their comments. This enhanced role supports efforts to combat economic crime and strengthen trust in the business environment. I note your comments regarding the dormant accounts filed.  It is possible that the above company name has been registered to protect the name, however the business would not operate as a limited company, but as an unincorporated business, in the knowledge that the company name cannot be registered by another person. I note the eBay website provided.  We could not act on this due to their not being any evidence of the business trading as a limited company. For us to further consider the matter further, we would require receipts/payments in the name of the ‘limited’ company clearly indicating that transactions were made through the company’s bank account during the periods in which it delivered dormant accounts to Companies House.  On receipt of such evidence, we can write to the company for an explanation.  Depending on that explanation, we would consider seeking revised accounts. I hope this clarifies our position and is of assistance"

We replied and stated that it was not possible for us to obtain such evidence since eBay was the payment processor.  The business in question was only showing its name and no Company Number on eBay at that time. We asked Companies House to contact eBay directly and ask for this evidence.  They replied with the following :

 "Thank you for your email. As stated in my previous email, under the Economic Crime and Corporate Transparency Act 2023, we have been granted limited investigatory powers. These powers enable us to query or challenge information submitted to the register if it is deemed appropriate, or if a complainant provides substantive evidence, that warrants further investigation which in some instances will mean we write to the company asking for their comments. To clarify, with our limited investigatory powers, I will not be able to write to eBay for evidence. Regarding the name of their bank accounts, we are unable to proceed with an investigation, as we are unable to deal with matters involving bank details. To clarify, for us to further consider the matter further, we would require receipts/payments in the name of the ‘limited’ company clearly indicating that transactions were made through the company’s bank account during the periods in which it delivered dormant accounts to Companies House.  On receipt of such evidence, we can write to the company for an explanation.  Depending on that explanation, we would consider seeking revised accounts. I hope this clarifies our position and is of assistance"

We then noticed that the Company in question was also trading on Onbuy and listing their company number  so we informed Companies House by email

A few days later we received this response from Companies House:

"Thank you for your email. I note the attachments. From the OnBuy website I can see a company number, matching them to the above-mentioned company. I will write out to the company for comment and advise them that they may wish to file revised accounts. Please note we do not provide updates on any investigations considered or ongoing but please be assured we are in the process of seeking rectification. Thank you for bringing this to my attention". 

We also provided this information to eBay.  Subsequently the Company showed their correct details on eBay yet is still trading as a dormant company in breach of the Companies Act and potentially eBay's user agreement, which states that all relevant taxes should be paid. 

Nothing has been heard back from HMRC. We wrote to OnBuy who have since informed us that they are investigating.

The Company in question also sells through a second eBay username, based in the West Country, yet the products are sent from the address of the director of the first company in Northampton which is against eBays rules. We reported the linked accounts to eBay.  As of today no action has been taken.

It is not at all difficult to spot if a Company is dormant and trading. However there is a lag in Companies House data which means that it is always out of date and therefore does not always show the current trading status of a business. If we were able to query the dormant accounts that our example filed they might tell us the company was dormant but is now active. However we would have no way of validating their dormancy or otherwise, for nearly a year, when their accounts become due in the Summer of 2026. Even then they could do a little trick by extending their filing deadline to the Autumn of 2026 by shortening their accounting period by 1 day (which gives a 3 month filing extension). Furthermore they still might not file their accounts for another 6+ months after the deadline (risking penalties) before Companies House starts a strike-off process. This process would then take another 10 weeks (and could be stopped by filing accounts). Overall, in theory, it might not be possible to find out what the true situation in October 2025 looked until June/July 2027!

This issue cannot be unknown to Companies House. Surely it would be possible to come up with a fix ? We have demonstrated just how difficult it is to report these kinds of behaviours or even find anyone who will own the problem and in the meantime these companies continue to trade, skew the market through tax abuse and make their escape, safe in the knowledge that the system works in their favour.

A simple solution would be firstly to make Online Marketplaces collect VAT on everything and secondly an online marketplace fraud team within HMRC could be set up. This team would provide a central point for online retailers to report fraud. If there was a central team to which these fraudsters could be reported and that team had the powers to investigate, then any suspicious activity could be reported to the relevant Government Agencies in a coordinated manner. If needs be that same same team could make recommendations for changes in legislation and procedures to ensure a rapid reaction to any abuses.

At the moment anyone attempting to report this behaviour appears to be passed from pillar to post.