Economic Crime and Corporate Transparency Act 2023: what is it and how can I prepare for the identity verification process?

The ECCTA came into force in October 2023 with the aim of improving the transparency of data relating to UK corporate structures and reducing economic crime within the UK. For these purposes, the ECCTA has introduced several reforms to the role and functions of the UK Registrar of Companies (Companies House), which are being implemented through a 'transition plan' between 2024 and 2027. 

The first set of changes under the ECCTA were introduced last year, including the requirement for:

• companies to supply a registered email address as well as having an appropriate UK-based registered office address (PO box addresses are not sufficient)
• companies, on incorporation, to confirm that they have been formed for a lawful purpose and each year confirm (when filing the confirmation statement at Companies House) that their future activities will be lawful
• stronger checks on company names to ensure that they do not give false or misleading impressions to the public. 

A couple of other key developments will take place on 18 March 2025, the first being that Companies House will be able to expedite the striking off of companies where it has concluded that a company has been formed for a false basis. In addition to this, the registration for authorised corporate service providers (“ACSPs”) with Companies House will 'go live', which comes after an initial postponement last month and is part of rolling out the identification verification processes and requirements that will become compulsory from Autumn 2025 (more on this below.) 

Under this regime, the following will need to have their identity verified with Companies House:

• all existing and new directors and persons with significant control (“PSCs”)
• a relevant officer of all existing and new relevant legal entities (“RLEs”)
• authorised corporate service providers (“ACSPs”)
• all those filing documents with Companies House.

Under current proposed timescales, individuals will be able to voluntarily verify their identity with Companies House from 8 April 2025. From a date in Autumn 2025 (such date is yet to be confirmed), identity verification will be compulsory on incorporation for new directors and PSCs, and a 12-month transition period will begin for all existing directors and PSCs after which verification will be compulsory for all directors and PSCs. By Spring 2026, identity verification will be required for those filing any documents on behalf of a company, and ACSPs must be registered with Companies House. 

There will be two routes for identity verification with Companies House: 
a person can verify their own identity directly by opening an account with Companies House, or indirect verification by an ASCP.

Direct verification 

There are three options to verify your identity with GOV.UK One Login: 

• GOV.UK Check App: you will need to download this app on a suitable smartphone with a working camera (in order to take a selfie). You will also need a form of UK ID (e.g. driving licence, passport, biometric residence card or UK Frontier Worker permit).
• GOV.UK One Login Web Channel: you will be required to answer security questions relating to your personal details, as well as providing a UK photo ID (e.g. UK passport or UK driving licence).
• One Login face to face service at a Post Office: you will be required to provide details of your photo ID on GOV.UK and attend a post office with your ID documents (which will be scanned and your photo will also be taken). You will then be updated on the verification result by email. This option is available for individuals with the following types of ID: UK and non-UK passports, UK and EU driving licences, UK biometric residence permit or national identity photocard from an EEA country. 

Under current proposed timescales, individuals will be able to voluntarily verify their identity with Companies House from 8 April 2025. 

Indirect verification by an ASCP

An ACSP must be an individual or organisation already registered with an anti-money laundering (AML) supervisory body (such as law firms or accountants).  An ACSP will be required to follow a process for verifying a person’s identity and then submit a statement to Companies House confirming that they have completed such identity verification.

Firstly, it is advised that you review your current systems for collecting and maintaining director and PSC records. Following that, check that your directors, PSCs and any other persons filing documents on behalf of your company have up-to-date ID documents available (for the purposes of verifying their identities). 

You should also train and inform your staff of the identification processes, particularly if they will be filing documents on behalf of your company at Companies House and, once possible, existing directors and PSCs should verify their identity at Companies House prior to it becoming a compulsory requirement – the sooner its done, the better!

You can also consider if it is worthwhile appointing an ACSP and whether the persons already filing documents on behalf of the company (e.g. law firm or accountant) if intending to register as an ACSP. 

For more insights, follow our updates as and when there are further details on the identity verification processes, and other key points in connection with the ECCTA.