Highlights
- The Economic Crime and Corporate Transparency Act 2023 is changing the role of Companies House and, more specifically, introducing new identity verification requirements for individuals involved with UK companies, mainly directors, people with significant control and those filing information.
- The requirements are expected to become mandatory this autumn 2025 for new appointments and incorporations, and for existing roles there will begin a 12-month transition period linked to submission of a relevant entity’s next annual confirmation statement.
- Those impacted can verify their identity in one of two ways: directly with Companies House, or through an Authorised Corporate Service Provider. The route chosen will determine which identity documents are required, and the process that needs to be followed.
- Once the regime comes into force, acting as a director while unverified will be a criminal offence and may result in a fine. Companies will need to ensure that their directors do not act unless verified, or the company may also be committing an offence.
- More than 7 million individuals are expected to become subject to the new identity verification rules later this year. If you or your business is caught by the new regime, early voluntary verification is strongly encouraged now, before the mandatory regime comes into effect.
For more information, please see our guidance note.
To find out more about what the ECCTA reforms mean for you, and to discuss what you need to do next in more detail, please don’t hesitate to contact us.
What you need to know about the ECCTA 2023
The Economic Crime and Corporate Transparency Act 2023 (“ECCTA”) introduced a significant new requirement: identity verification for individuals involved in the management and control of UK corporate entities. These reforms are designed to enhance transparency and prevent the misuse of corporate structures. While the obligations are expected to become mandatory in stages from autumn 2025, individuals and businesses are strongly encouraged to prepare now.
Who is required to verify their identity?
Identity verification will be required for all company directors, LLP members, people with significant control (“PSCs”), relevant officers of relevant legal entities, and those who submit filings to Companies House. The rules will also apply to individuals acting as Authorised Corporate Service Providers (“ACSPs”), a new Companies House authorised agent created by ECCTA. ACSPs, who will be intermediaries such as law firms and accountants, once registered as such will be able to verify identities and submit information to Companies House on behalf of others.
Why do you need to verify your identity?
The process for verifying identity is expected to be straightforward and, for most people, a one-time requirement. Once verified, individuals will receive an 11-character unique identifier code that will be used to link them to their appointments across relevant different entities. This code will not be publicly disclosed but will be necessary for interactions with Companies House going forward, such as director appointments, confirmation statement filings, and changes in PSC status.
Although identity verification will not become mandatory until autumn 2025, a voluntary system is now live. Early action is advisable to avoid delays once the compulsory regime comes into force. From that point, individuals who have not been verified should not act as a director, and doing so may constitute a criminal offence. Companies that allow unverified directors to act could also face enforcement action.
How can you complete the process?
There are two ways to complete identity verification. The first is directly through Companies House using the GOV.UK One Login service, which is free and accessible via a mobile app, a web browser or, in person at a Post Office. The mobile app route is typically the most efficient, particularly for those with a UK biometric passport or photo driving licence. Those using the web browser route will need to answer personal security questions linked to credit records, and there is only one chance to pass this check. Alternatively, verification can be carried out through an ACSP. This may be particularly helpful for non-UK residents or those who do not hold suitable identity documents for the direct process. ACSPs will charge a fee for this service and not all ACSPs will offer identity verification, so it is worth confirming in advance.
We recommend that businesses review which individuals in their organisation are likely to be affected, ensure they have the right identity documents in place, and encourage them to complete the verification process sooner rather than later. Those verifying directly with Companies House should make a note or screenshot of their unique identifier code as soon as it is issued, as there may be a delay before it appears formally on their Companies House account.
More information and expert advice
For more information, please see our guidance note. If you have any questions about identity verification or any other aspect of the ECCTA reforms, please don’t hesitate to get in touch with our expert advisers.