When Reporting Tax Abuse Falls on Deaf Ears: Companies House - A Case Study

Six months or a year is a long time in business. Two, three, or five years is a lifetime. Yet when it comes to tackling market distortions caused by tax abuse in online retail, the UK's authorities have consistently been slow to act — and sometimes slow even to recognise that a problem exists — despite the very real damage being done to legitimate UK businesses.

Businesses are not statistics. They represent livelihoods for owners and their employees. They generate the tax revenue that funds the public services we all depend on. They are neighbours, family, friends, employers. When tax abuse goes unchecked, it is not a victimless crime.

I know from personal experience the damage that can result from the authorities' failure to address obvious and blatant tax abuse in this sector. Readers are encouraged to explore my podcast series for more background on that story.

As part of an ongoing series of posts examining current abuses, RAVAS has been investigating how UK authorities respond when these issues are actually reported to them. What we found raises serious questions.

Putting Companies House to the Test

Much has been made recently of improvements to Companies House and its enhanced powers to tackle fraud and abuse. In this post, we examine what happens in practice when a member of the public reports suspected tax evasion through official channels.

The following account was shared with RAVAS by an individual we will refer to as Mr X. He reported a UK-registered online business — referred to here as A Business Ltd — to Companies House on suspicion of tax evasion.

The exchanges below date from the autumn of 2025.

The Paper Trail: What Happened When Mr X Reported "A Business Ltd" for Tax Evasion

Mr X had done his homework. He had identified a UK company — "A Business Ltd" — that appeared to have been actively trading on eBay for several years whilst simultaneously filing dormant accounts with Companies House. The company's status was listed as active on the register, yet it had filed dormant accounts that declared no trading activity whatsoever. From a Companies House perspective, the active status does not mean that a company is actively trading, it merely indicates the company name is in use, and filing dormant accounts is not, on its own, an indicator of tax evasion. However, "A Business Ltd." had been trading on eBay for several years and by using eBays internal product research tool Mr. X was able to ascertain that in the previous six months "A Business Ltd" had made £9k in sales on one product listing. Mr X reported the matter to both Companies House and HMRC, citing potential Corporation Tax evasion. He also reported the dormant account filings to Companies House as potentially false declarations.

Companies House initially directed him to the Insolvency Service, suggesting they would "deal with it." Mr X duly followed up. To date he has heard nothing back.

A few weeks later, he received the following letter from Companies House:

Dear Mr X,

Thank you for your email. I would like to explain that Companies House is essentially a registry of company information… 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…

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…

We could not act on this due to there not being any evidence of the business trading as a limited company. For us to further consider the matter, 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…

Read that carefully. Companies House was asking Mr X — a private individual with no legal powers of compulsion — to obtain bank transaction records from a business he had no connection to. The suggestion that the company may simply have registered its name "to protect it" and was in fact trading as an unincorporated business is, to put it charitably, a stretch. It also conveniently sidesteps the question of whether any tax was being paid at all.

Mr X pointed out the obvious problem: the seller on eBay was not identified as a limited company. eBay was the payment processor. He had no means of obtaining receipts in the company's name. He asked Companies House to contact eBay directly and to query the name on the business's bank accounts.

The response was brisk:

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…

So, Companies House could not obtain evidence itself but also could not act without evidence it expected Mr X to produce. The circumlocution was complete.

The Breakthrough — and What Followed

Mr X refused to give up. A few weeks later, he discovered that the same business was trading on OnBuy — a rival marketplace — and crucially, was displaying its full company registration number there. He sent this information to Companies House. This time, the response was different:

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…

Progress — of a sort. Mr X also forwarded the information to eBay. Shortly afterwards, the correct company details appeared on the eBay listing. But here is where the story takes another troubling turn: by trading whilst filing dormant accounts, "A Business Ltd" was in clear breach of eBay's own user agreement, which requires sellers to comply with all relevant tax obligations. Despite this, eBay took no action to suspend or remove the seller. HMRC, meanwhile, remained silent.

Mr X had also identified a second eBay account linked to the same director — operating under a different username, listed as based in Somerset, yet dispatching goods from the director's address in Northampton. He reported this to eBay. Again, no action was taken.

Based on publicly visible feedback data, Mr X estimated that "A Business Ltd" had sold in the region of £300,000 of goods over four to five years — carefully staying just under the VAT threshold each year. If his assessment of the Corporation Tax position is correct, no tax had been paid on any of it.

Revised Accounts — But Not the End of the Story

Companies House eventually confirmed that on 13 October 2025, following its correspondence with the company, revised accounts had been filed. In its letter to Mr X, it also clarified its position on two points: it would not be referring the matter to HMRC — it considered that outside its role — and it would not be contacting eBay.

When Mr X examined the revised accounts, the declared sales of less than £2000 still did not appear to tally with the volume of sales he could observe online which were considerably higher. He wrote back, citing Sections 1112–1114 of the Companies Act 2006, which make it a criminal offence to deliver false, misleading, or deceptive documents to the Registrar. He noted that the Registrar also holds powers to act where filings are suspected to be non-compliant. He asked, directly, whether Companies House would investigate.

The final reply said everything:

I note you believe the amended accounts are incorrect, however, after careful consideration, there is no substantive evidence that meets the threshold required for further regulatory intervention.

To clarify, I note the eBay website provided. We cannot act on this due to there not being any evidence of the business trading as a limited company…

As such, no further action will be taken by Companies House in relation to this matter and we deem this case currently as closed.

Closed. Despite the revised accounts. Despite the OnBuy listing with a matching company registration number. Despite the eBay sales data visible to anyone with a browser.

The same rationale that had been rejected — "no evidence of trading as a limited company" — had been quietly reinstated as the reason for closing the case, even after Companies House had itself found the matching company number on OnBuy and written to the company as a result.

In November last year I was invited to a meeting in Westminster at which senior officials from both Companies House and HMRC were present.  I raised this example in the meeting as a lack of enforcement and was told “that was the old regime” yet today, five months later, the company is still trading under "the new regime". Nobody from either HMRC or Companies House contacted me for further information on this case.  

What This Case Tells Us

This is one case. But it is not, in RAVAS's experience, an unusual one. What it illustrates is a systemic problem: the gap between the powers that Companies House has been granted under the Economic Crime and Corporate Transparency Act 2023 and the willingness to use them. The burden of proof is placed entirely on private individuals who have no investigatory powers, no access to financial records, and no legal standing to compel disclosure from platforms or banks. At the same time those individuals are having to suffer abusive tax-free competition.  It is more galling when they have flagged the offending party, and nothing is done about it.  

It seems businesses apparently filing false accounts are invited — politely — to submit revised ones. They face no investigation and therefore no penalty. They continue trading. The tax goes uncollected. Law-abiding, tax-paying competitors continue to be undercut. And the Exchequer continues to lose revenue that it is legally owed.

That this is tolerated is remarkable. That it is routine is worse.

In the posts that follow, RAVAS will be examining further cases where the same pattern repeats — the same inaction, the same asymmetry, the same cost borne by those who play by the rules.