Economic Crime and Corporate Transparency Act 2023: Launch of the Identity Verification Regime

The Government’s new identity verification (IDV) regime for directors and controllers of UK companies launches on 8 April 2025. The regime will also apply to members and controllers of limited liability partnerships (LLPs) and, more narrowly, to limited partnerships and overseas companies with an establishment in the UK. The IDV regime is part of the package of reforms contained in the Economic Crime and Transparency Act 2023 (ECCTA) aimed at tackling economic crime and preventing the abuse of corporate structures by enhancing the transparency of corporations and those that control them.

Until Autumn 2025, completing IDV checks will be voluntary. From Autumn 2025, IDV will be mandatory when incorporating new companies and for any new appointments made by existing companies. There will be a 12-month transitional period, also starting in Autumn 2025 and linked to a company’s annual confirmation statement deadline, for in-post directors and existing controllers to complete IDV checks.  

Preparing for IDV – what do I need to do now?

Although IDV will not become mandatory until Autumn 2025, there are steps individuals and organisations can take now to prepare.

For individuals required to undertake IDV:

• familiarise yourself with the methods available for IDV - see Guidance: Identity verification;
• check whether you have ID documents that meet the requirements for using the free Government IDV service;
• if not using the Government service, find an authorised corporate service provider (ACSP) that provides this service and check what ID documents they will require;
• check that the ID documents you intend to use are up-to-date, unexpired and available;
• make sure your details (date of birth, name etc) registered at Companies House are up-to-date and match your ID documents; and
• start the IDV process now to ensure your compliance deadline is not missed.

For organisations, particularly large corporate groups:

• identify which group companies and partnerships will be affected, their expected deadlines for compliance and the individuals within those companies and partnerships required to complete IDV;
• identify any group companies or partnerships registered as “relevant legal entities” (RLEs) under the persons with significant control (PSC) regime and determine who will be appointed as the “relevant officer” for each;
• consider requiring new directors to complete IDV checks on appointment, even before it becomes mandatory in Autumn 2025, to reduce the compliance burden after Autumn 2025;
• encourage existing directors, PSCs and RLEs to start the IDV process now to ensure compliance deadlines are not missed; and
• consider how IDV requirements should be built into compliance regimes, including processes for on-boarding new directors and updating changes of relevant officer for RLEs. 

Background

ECCTA was enacted as part of Government efforts to combat economic crime and enhance corporate transparency. Since receiving Royal Assent on 26 October 2023, the Act has transformed the role of Companies House and the Registrar of Companies from a relatively passive information depository to an effective regulator with powers of enforcement. Our previous updates on ECCTA are linked at the end of this article.

IDV is designed to ensure that the identities of individuals owning and controlling companies are known and checked, making it harder for criminals to use UK companies for illicit activity. The introduction of ACSPs (regulated entities such as accountants, solicitors and company service providers that have registered at Companies House as such) together with restrictions on who will be able to file information at Companies House (due in force in Spring 2026), are aimed at preventing fraudulent filings and supporting Companies House in ensuring the accuracy of information filed on the register.

Companies House opened the registration process for ACSPs on 18 March 2025 and, in advance of launching its IDV service on 8 April 2025, published guidance aimed at individuals who will need to verify their identity under the new regime: Guidance: Identity verification.

The launch of the ACSP and IDV regimes marks the beginning of the most significant of the transparency changes contained in ECCTA.

Identity verification: who needs to verify?

The IDV regime will require the following individuals to verify their identities:

• directors of UK registered companies;
• members of UK registered LLPs;
• PSCs;
• the relevant officer of any registrable RLE under the PSC regime;
• directors of overseas companies required to register a UK establishment at Companies House;
• the relevant officer of any corporate entity acting as a general partner of a limited partnership;
• individuals registered as ACSPs; and
• those filing documents with Companies House (other than individuals working for an ACSP and filing under the authority of that ACSP).

Although company secretaries are not required, by virtue solely of their office, to complete IDV, once the filing restrictions come into force in 2026 they will need to be ID verified if they are to continue to file documents at Companies House for their appointor companies.

IDV should be a one-time process so, for example, an individual holding multiple directorships, or who is both a director and a PSC, will only need to have their identity verified once.

The IDV regime introduces a number of new criminal offences for failure to comply. These offences are not only committed by the relevant individual, but in certain cases can also be committed by the relevant company and its other officers. For example, once the provisions requiring directors to be ID verified are mandatory, an individual will commit an offence if they act as a director of a company without being ID verified and, because the company will also be under an obligation to ensure that no individual acts as a director without being ID verified, the company and every officer in default will also commit an offence.

How will identity verification be carried out?

There will be two possible routes to complete IDV: either via a free Government service or through an ACSP that offers this service.

The Government service uses the GOV.UK One Login service to verify identities either online (via an app or web browser) or in person at a Post Office. The Companies House guidance explains the types of identification evidence that will be acceptable depending on the route taken. Generally, individuals with:

• a biometric passport from any country; or
• a UK photo driving licence; or
• various specified UK-issued residence or work permits,

should be able to use either the app-based or web browser route. 

Individuals without these forms of ID will be able to use a Companies House service “Verify your identity for Companies House” to establish how they should verify their identity. If resident in the UK, that may be in person at the Post Office.

The Government service may be difficult for non-UK resident individuals without a biometric passport and those individuals may need to use an ACSP to verify their identity.

ACSPs will be able to provide ID verification services both for straightforward cases and for more complicated cases where the online Government route may not be available.  The ACSP will be able to advise the individual on what information and documentation is required to complete the verification.

When will identity verification be required?

From 8 April 2025: individuals will be able to voluntarily verify their identity using either the GOV.UK One Login route or using an ACSP.

From Autumn 2025: identity verification of directors, PSCs and relevant officers of RLEs is expected to become compulsory on all new incorporations and for new appointments and PSC/RLE filings, although the exact date has not yet been published.

Between Autumn 2025 and Autumn 2026: identity verification of the more than 7 million in-post directors and existing PSCs and RLEs will become compulsory over a 12-month transitional phase. We anticipate that this will require companies to ensure the IDV of directors is confirmed at the time of filing the annual confirmation statement due during that period, and PSCs to ensure confirmation of their IDV (or, for a RLE, the IDV of their relevant officer) is filed at the same time.

For LLPs and overseas companies: although the Companies House Transition Plan, which sets out the timetable for reform under ECCTA, does not mention when the IDV requirements for LLPs or overseas companies will come into force, it would be prudent to assume that the timing will align with that of UK limited companies.

For limited partnerships: more fundamental changes are being made to the transparency requirements for limited partnerships, and these are not expected to come within the IDV regime until 2026.

For those filing at Companies House: when the ECCTA provisions dealing with filing restrictions come into force (expected to be in Spring 2026) only individuals who are ID verified and linked to the relevant entity, or who are ACSPs, or filing under the authority of an ACSP, will be able to file documents at Companies House.

Conclusion

The implementation of the IDV and ACSP regimes marks a significant shift in the regulatory landscape for UK companies and LLPs and it is crucial for affected individuals and entities to understand and prepare for these changes.

As verification is a one-time process there will be little to be gained by existing directors, LLP members and PSCs waiting until the relevant deadline to complete their IDV; they are recommended to complete the verification as soon as practicable during the voluntary period.

Verifying early will mean that, if complications arise, there is less likelihood of a missed deadline and potential fines for non-compliance. Additional time may be needed to complete IDV for individuals who are foreign nationals or resident overseas; or whose details at Companies House do not match their ID documents because of a change of name, use of a maiden name, or mistake in the original Companies House filings; or whose ID documents have expired and need to be renewed. Where information at Companies House is out of date or incorrect, corrective filings may be needed first, some of which can only be made in paper form, which will further delay the process.

Compliance will be more involved for a company (or LLP) which is also registered as a RLE in the PSC register of another entity: it will need to appoint a director as its relevant officer (and ensure that individual is ID verified and makes the required statement to Companies House confirming their appointment as the relevant officer) at the relevant time. Again, planning ahead and acting early will help ensure the process runs smoothly and deadlines are not missed.

For company secretarial functions in large corporate groups, who will be managing differing deadlines for different group companies and IDV processes for multiple directors, RLEs and PSCs, the compliance matrix will be more complex still. In addition, processes for on-boarding new directors will need to accommodate the new requirements to ensure that directors have completed IDV before appointment. Similarly, procedures will need to be put in place to ensure that any leaving director who  is the relevant officer of a group company RLE is replaced within the statutory timescale.

Looking forward to 2026, company secretaries and other individuals employed to undertake company secretarial functions, who are not themselves directors, will also need to have their identity verified to continue to be able to file documents on behalf of group companies.

Help and previous updates

CMS will be helping clients prepare for the IDV regime, and guiding them through the IDV process, using either the Government pathways or referring to specialist ACSP verifiers where necessary. If you would like to discuss any of the above with a member of the CMS team, please get in touch with your usual CMS contact.

For more detail on ECCTA, see our previous updates: Another step towards transparency: the Economic Crime and Corporate Transparency Act 2023 becomes law (8 November 2023); Economic Crime and Corporate Transparency Act 2023: changes expected to come into force on 4 March 2024 (20 February 2024); and The Economic Crime and Corporate Transparency Act 2023: Companies House publishes timetable for implementation (28 October 2024).