Businesses face chaos due to identity verification turmoil affecting millions.
In just over two years, the Economic Crime and Corporate Transparency Act reforms will require all UK company directors to verify their identities. The deadline for new directors begins on 18 November 2025, with existing directors having a 12-month transition period, typically when they file their next annual confirmation statement, with full compliance expected around mid-November 2026.
To ensure a smooth transition, businesses should take proactive steps to prepare:
- Encourage early voluntary verification: Directors and People with Significant Control (PSCs) can already verify their identities voluntarily via GOV.UK One Login or through authorised agents. This will help avoid last-minute compliance challenges.
- Register and train Authorised Corporate Service Providers (ACSPs): Professionals such as solicitors and accountants can register as ACSPs to facilitate identity verification and filing on behalf of companies, simplifying the process and promoting compliance.
- Educate directors and PSCs: Companies should communicate requirements clearly to all directors and PSCs, informing them about the process and deadlines to prevent disruptions to company operations caused by non-compliance.
- Implement internal tracking: Use Companies House’s tools to monitor upcoming ID verification due dates for directors and PSCs, ensuring timely action within the transition period.
- Integrate identity verification into company onboarding and compliance workflows: Embedding the new verification steps into usual company procedures can improve adherence and reduce risk of penalties or legal actions for failure to verify identities.
These measures aim to improve transparency, combat fraud, and protect companies from economic crime. Failure to verify may result in inability to act as a director or file documents, as well as potential legal consequences.
Companies House is contacting all companies with advice and guidance on the identity verification process. They are also planning a campaign to raise awareness of the changes. However, some business owners have found the process cumbersome and time-consuming, with some paying accountants hundreds of pounds to verify their identities.
Hotelier Elyse Waddy believes that Companies House should have sent the email to accountancy firms who could pass the information on to companies to ensure its authenticity. Meanwhile, Paul Milsom, owner of Milsom Hotels, questions why the change isn't prioritizing new company directors first.
As the deadline for seven million company directors to verify their identities approaches, with only 300,000 having done so so far, it's crucial for businesses to prepare and act early to ensure a smooth transition. Companies House expects to process all company directors over the next 12 months, which would take until 2032 at the current rate.
- To avert potential financial penalties and legal consequences, it may be prudent for businesses to start investing in identity verification for their directors, as the Economic Crime and Corporate Transparency Act reforms require verification for all UK company directors by mid-November 2026.
- In the realm of finance, it's essential for businesses to familiarize themselves with the changes in company director identity verification, especially considering the business complexities and the vast number of UK directors involved, totaling approximately seven million.
