Identity verification under the Economic Crime and Corporate Transparency Act 2023

The Economic Crime and Corporate Transparency Act 2023 introduced the concept of mandatory identity verification for all UK companies. This was part of a general push for greater transparency within UK companies and to deter the use of companies for unlawful purposes. This briefing explains what companies need to know at this time.    

Who is required to have their identity verified? 

Once implemented, identity verification (IDV) for UK companies will apply to: 

• Directors (irrespective of their nationality or where they are resident). 

• Persons with significant control (PSCs) who are notified to Companies House under the PSC regime.  

• Those persons filing documents at Companies House on behalf of a company (such as a company secretary). 

When does IDV need to be undertaken? 

Companies House has produced a timeline which indicates:  

• By Autumn 2025, compulsory IDV will apply to directors and PSCs on new company incorporations. It will not be possible to complete the incorporation process unless each initial director’s identity has been verified first.   

• By Autumn 2025, compulsory IDV will also apply to any newly appointed director and newly notified PSC of any UK company. Directors will be prohibited from acting until their identify is verified and confirmation of verification will need to be included in their notice of appointment to Companies House. 

• A further 12-month transitional period (once compulsory IDV takes effect) will apply for the IDV of all existing directors and PSCs of UK companies. The timing of verification for existing directors will be linked to the submission of a company’s next confirmation statement once this transitional period begins. It is anticipated that IDV of all directors and PSCs should be completed by Autumn 2026.  

• In future, filings on behalf of companies will only be able to be undertaken by ID-verified individuals within a company or by an “Authorised Corporate Service Provider” (as explained below) on their behalf. These restrictions are not expected to take effect until Spring 2026.   

How will an individual’s identity be verified? 

There are two possible routes to ID verification as explained in Companies House Guidance: 

• Directly free of charge with Companies House. 

• By an Authorised Corporate Service Provider (ACSP) who will in turn confirm to Companies House that it has completed the identify verification process.  

The Companies House route will require individuals to go through the GOV.UK One Login which will then direct the individual to verify their identity online either via the mobile phone app route or web browser route. The individual will need to provide certain personal information as well as identity evidence such as biometric passport, UK photo driving licence or UK biometric residence permit. The precise documentation acceptable for IDV depends on the Companies House route used. The other alternative for a person living in the UK is to verify at a designated Post Office though, inevitably, this will take more time.  

The ACSP route enables the individual to use a third party provider to complete IDV on their behalf. ACSPs are individuals or organisations such as accountants, solicitors, chartered secretarial organisations and similar who have registered with Companies House as an ACSP and whose own identity has been verified. They are obliged to verify to the same standard as a person who verifies directly with Companies House.    

Once a person is ID verified Companies House will issue to the individual a unique identifier number (otherwise known as a personal code) as evidence of IDV. IDV will also need to be confirmed on certain filings with Companies House. In most circumstances an individual will only need to undertake the verification once. In other words, if an individual holds multiple directorships, they will still only require one IDV check.  

At the current time IDV is entirely voluntary with mandatory IDV taking effect later in the year. Both routes of IDV explained above are, however, intended to be available from 8 April 2025.   

What are the consequences of failing to complete identity verification? 

In future, an individual whose identity is not verified will be unable to be appointed as a director on the incorporation of a new company. In addition, a director who fails to verify their identity in accordance with the timescales mentioned above and continues to act as a director will be committing an offence (as will the company and each of its officers). The Act does however clarify that the actions of the defaulting individual as director will still be valid. Offences will also be committed by PSCs who fail to comply with their verification obligations. 

A new offence has already been brought into force by the Act of providing false, misleading or deceptive information to the Registrar “without reasonable excuse”. This would include where a false statement was made to the Registrar regarding identity verification of an individual.  

What to do now? 

Companies should ensure that their directors are aware of these IDV requirements and suggest that directors commence checking now that they have the relevant identity documentation necessary for IDV. Current directors and PSCs would do well to consider how they wish to go about IDV and set a timeframe for completing this.  Undertaking IDV during the current voluntary period to ensure pro-active compliance in advance of the relevant deadlines is recommended.   

The Government’s intention is that IDV will also apply to members and PSCs of limited liability partnerships (LLPs). We are still awaiting confirmation of the implementation timetable for LLPs but expect this to align with the dates for UK companies.