Identity verification under the Economic Crime and Corporate Transparency Act 2023 — what it means for your company
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The Economic Crime and Corporate Transparency Act 2023 (ECCTA) introduces mandatory identity verification which will apply to all UK companies. The Act is aimed at enhancing corporate transparency and preventing economic crime in the UK. This briefing outlines the purpose of the ECCTA identity verification regime, sets out key steps for compliance and provides practical advice to prepare for when the Act comes into effect.
Purpose of ECCTA identity verification regime
The incoming identity verification requirements under ECCTA are aimed at improving the accuracy of information at Companies House, reducing anonymous and fraudulent filings and making it more difficult to conceal company control and ownership. The introduction of a robust identity verification regime seeks to ensure that individuals on the Companies House register are who they claim to be and will help deter those wishing to use companies for illegal purposes.
Key requirements for identity verification
Who must verify their identity?
Once implemented, the following key individuals involved in a company's operations will be required to verify their identity (unless an exemption has been obtained for national security or serious crime prevention reasons):
- Directors: All directors must verify their identity when incorporating a company. Existing directors must verify their identity on a transitional basis.
- Persons with significant control (PSCs): Individuals or relevant officers of relevant legal entities (RLEs) must verify their identity during company incorporation or upon changes to their PSC status. Existing PSCs will be required to verify their identity on a transitional basis
- Individuals filing documents: Anyone filing documents at Companies House must verify their identity before submission.
Verification methods
- Direct Verification by Companies House:
Via the GOV.UK ID Check app, GOV.UK One Login service or at a Post Office with voluntary notification starting in March 2025.
- Indirect Verification through Authorised Corporate Service Providers (ACSPs)
Accountants, legal advisers and other corporate service providers subject to anti-money laundering regulations can apply to become authorised verifiers from February 2025.
Implications of non-compliance
Failure to comply with ECCTA identity verification requirements can lead to significant penalties, including criminal charges, fines and potential imprisonment.
Practical advice to prepare for compliance
- Review and update details: Conduct a review of all directors' details and the PSC register and ensure that the information held at Companies House is accurate and up to date.
- Monitor legislative updates: Follow Companies House for updates on the implementation timeline and compliance requirements.
- Verification: Once available, verify identities promptly either directly or using an ACSP.
- Engage professional assistance: Legal advisers or ACSPs can advise on the identity verification process.
- Implement internal controls: Develop procedures to manage identity verification obligations.
Implementation timeline (as of January 2025)
- From 25 February 2025: ACSPs can seek authorisation to perform identity verification services
- From 25 March 2025: Begin voluntary identity verification using the GOV.UK One Login or an ACSP.
- By Autumn 2025:
- Mandatory identity verification for new incorporations, directors, PSCs and RLEs.
- 12-month transition for existing directors, PSCs and RLEs with details to be provided when annual confirmation statements are filed.
- By Spring 2026:
- Mandatory identity verification for document presenters
- Third party agents presenting documents required to be registered as ACSPs.
- By the End of 2026: End of the transition period and enforcement.
Conclusion
ECCTA's identity verification regime is a crucial step towards greater corporate transparency and crime reduction. Companies should prepare to comply with these requirements now.
How Fieldfisher can support you
- Read our detailed guide on ECCTA.
- Stay informed with updates on ECCTA from Fieldfisher.
- Our corporate team can offer guidance to navigate these requirements. Please contact Ruth Lewis or your usual Fieldfisher corporate contact for further advice.
- Fieldfisher provides comprehensive company secretarial services, including corporate secretary and registered office provision. Please contact Nick Currie for more information.
