Britain is to reduce the amount of information available publicly on its companies register after thousands complained their data could be used by fraudsters.

The move is part of an overhaul of operations at Companies House, which oversees the UK registry of more than four million businesses, after claims that scammers and money launderers are taking advantage of flaws in the system.

A report by anti-corruption group Global Witness found that Companies House did not make basic identity checks, meaning criminals could set up a UK company with false details.

The reforms come as Britain is preparing to issue an Order in Council the end of next year Territories, including Bermuda, have public beneficial ownership registers in operation by 2023.

In a statement released on Sunday, the British Government said companies and their owners would be better protected from fraud under a slew of Companies House reforms.

“In the last three years there have been almost 10,000 complaints to Companies House from people concerned about their personal details, with worries including fraud and use of personal details topping the list,” the statement added.

Last year the register was accessed about 6.5 billion times.

One of the proposed reforms aims to better protect personal information on the register.

“In a minority of cases the register can be misused to identify personal information, which can then be used for criminal purposes,” the British Government stated.

“Under these proposals, directors will be given additional rights over their information, for example personal home addresses, while ensuring this information is still available in a transparent manner to public authorities where appropriate.”

The Bermuda Government has kept a beneficial ownership register for more than 70 years. It is not open to the public, but its contents are available to government authorities under international information-sharing agreements.

David Burt, the Premier, has said Bermuda will be happy to comply with the British demands when public registers become “a global standard”. The Government has also argued that the Order in Council from the UK, if not approved by the Bermuda Parliament, would breach the island’s constitution. Global Witness’s report said the lack of ID verification at Companies House has helped UK companies to become “a conduit for scandal”.

“In among the millions of companies and partnerships created in the last few decades, there are thousands that seemingly exist for no other purpose than to launder money, on a mind-boggling scale,” Global Witness said.

“Once incorporated through Companies House, these companies are able to control bank accounts, own property and move money around the world in much the same way as a private person.”

Under the reforms, Companies House will get greater powers to verify and corroborate identities and submitted information.

Global Witness found that about 8 per cent of UK companies declared no “person with significant control”, the description given to an owner of a stake of 25 per cent or more.

According to Britain’s National Crime Agency, “there is a realistic possibility that the scale of money laundering impacting the UK annually is in the hundreds of billions of pounds”.

On its website, the agency states: “Virtually all high-end money-laundering schemes, and several cash-based ones, are facilitated by the abuse of legitimate processes and services.”

UK shell companies were found to have played a role in the Danske Bank and “Troika Laundromat” multibillion-dollar money-laundering scandals.