The Economic Crime and Corporate Transparency Act ('ECCTA') 2023 has introduced new compulsory identity verification (‘IDV') requirements for all individuals involved in running and controlling corporate entities in the UK. These requirements are part of the ongoing broader strategy to tackle economic crime, prevent the abuse of corporate structures and improve corporate transparency and oversight in the UK.
Who needs to verify their identity?
The new requirements are far reaching and include the following:
- New or existing directors of a UK company, including trustees of a charitable company who hold the position of directors under the Companies Act 2006;
- New or existing members of a UK limited liability partnership (‘LLP');
- New or existing people with significant control (‘PSCs'), or in the case of a PSC which is a relevant legal entity, an identified ‘relevant officer';
- New or existing general partners (‘GPs') of a limited partnership (‘LP') or, in the case of a GP which is a legal entity, an identified ‘registered officer' who must be an individual in the position of a managing officer;
- Directors of overseas companies that are required to register a UK establishment at Companies House; and
- Anyone making filings at Companies House, such as a company secretary or an authorised corporate service provider (‘ACSP').
When do the IDV requirements come into force?
Voluntary IDV of certain individuals at Companies House has been possible since 8 April 2025. From Autumn 2025 (date yet to be determined) the following will need to have their identity verified:
- New directors, PSCs and members of an LLP, either on incorporation or on their appointment; and
- Existing directors, PSCs and members of an LLP, on submission of the annual confirmation statement.
Companies House currently anticipates that the other IDV requirements will come into force in Spring 2026, including for those making filings at Companies House.
How does IDV take place?
Identity verification can take place:
- Online with Companies House;
- In person at a Post Office; or
- Through an ACSP.
Upon successful verification, individuals will be issued a unique personal code identifier. This can generally be used on an ongoing basis to verify their identity for all relevant positions held. In most cases IDV will only be required once, though exceptions may apply in circumstances such as name changes due to marriage or divorce.
What information is required as part of IDV?
This will depend on the route taken for IDV but in most cases documentation will include one or two of the following: a biometric passport, UK photocard driving licence, UK biometric residence card or permit, details of a UK bank account with national insurance number and/or proof of address. In all cases an individual email address will be required.
Are there any penalties for failure to complete IDV?
Breach of the IDV requirements is an offence and may attract an unlimited fine on the individual concerned or, in the case of a company, on the company and/or its directors. Equivalent sanctions are expected in respect of LLPs and their members.
In the case of companies, an individual whose identity has not been verified will usually be prohibited from acting as a director. Although such a breach will not invalidate their acts as directors, individuals should not act without IDV as they risk disqualification.
A new criminal offence has already come into force of providing false, misleading or deceptive information to the Registrar of Companies ‘without reasonable excuse'. This would include where a false statement is made regarding IDV.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
