What is discrepancy reporting?
Discrepancy reporting is the duty on regulated firms to tell Companies House when the beneficial ownership information on its register does not match what they found during customer due diligence. It is set out in regulation 30A of the Money Laundering Regulations 2017 (MLRs). Since 1 April 2023, you only report material discrepancies.
The duty applies whatever level of due diligence you use, including simplified due diligence (reg 37(2)(a)).
The UK rules
| Rule | What it says | Where |
|---|---|---|
| Check the register | Before establishing a business relationship with a company, LLP, eligible Scottish partnership, unregistered company, registered trust or registered overseas entity, collect an excerpt of the register’s beneficial ownership information, or confirm none is held | Reg 30A |
| Report | Report a material discrepancy between the register and the information otherwise available to you during your due diligence | Reg 30A |
| Keep checking | The duty also applies during CDD and ongoing monitoring once the relationship has started | Reg 30A |
| Who receives it | Companies House for companies, LLPs and partnerships; HMRC for trusts; Companies House for overseas entities | Reg 30A |
| Legal privilege | You need not report information protected by legal professional privilege | Reg 30A |
| What is material | A discrepancy that could reasonably be considered linked to money laundering or terrorist financing, or to conceal details of the client’s business | Sch. 3AZA |
Source: MLR regulation 30A and Schedule 3AZA.
What counts, and what doesn’t
| Usually material (report it) | Not reportable |
|---|---|
| A different name, or a missing part of a surname | Spelling errors and shortened names |
| An incorrect nature of control | Minor address variations |
| A wrong month or year of birth | “UK” on the register where the person gave English, Welsh, Scottish or Northern Irish |
| A wrong nationality | Differences caused by the different PSC and beneficial owner definitions |
| A significantly different correspondence address | Discrepancies already reported, or resolved before you report |
| A missing PSC or registrable beneficial owner | |
| A wrong date of becoming a registrable person |
Based on Companies House guidance. A discrepancy in a listed form must still meet the “material” test in Sch. 3AZA. For minor errors, you can suggest the company corrects its own register.
How to report
- Use Companies House’s online discrepancy service. You need the company number (or overseas entity ID), the type of discrepancy, what the register says and what you believe is correct.
- Make a separate report for each PSC or beneficial owner. Bulk reporting is not allowed.
- Report as soon as you find the discrepancy.
- Companies House investigates. It does not tell the company who reported it, and it does not send updates.
Source: GOV.UK: report a discrepancy about a beneficial owner on the PSC register.
What a small firm should do
- Download the PSC register entry for every company client before you start, and keep it on file.
- Compare it with what you learn when you map the beneficial owners.
- Decide whether a difference is material, record your reasoning, and report if it is.
- Repeat the check when you refresh CDD during the relationship.
A discrepancy can also be a reason to look harder at the client. If it suggests concealment, consider enhanced due diligence and whether a suspicious activity report is needed.
Frequently asked questions
Do I have to report every difference on the PSC register?
No. Since 1 April 2023, only material discrepancies are reportable: those that could reasonably be linked to money laundering or terrorist financing, or to concealing details of the client’s business. Spelling errors and minor address differences are not.
Does the company find out I reported it?
Companies House says it does not tell the company who made the report.
Is a discrepancy report the same as a SAR?
No. A discrepancy report goes to Companies House and is about the accuracy of the register. A SAR goes to the National Crime Agency and is about suspected money laundering. Sometimes you may need both.
How AML Buddy helps
You can verify each director, PSC and beneficial owner with their own AML Buddy link: ID document and selfie, address match, and sanctions, PEP and adverse media screening, with a timestamped report per person. Comparing results with the register and reporting discrepancies stays with your firm. Company (KYB) checks are coming soon. See pricing.