In this blog, we continue our series on the reforms under the Economic Crime and Corporate Transparency Act 2023 and update you on the new identity verification regime.
What is identity verification and who needs to do it?
The Act requires the following people to have their identity verified with Companies House:
- all existing directors and persons with significant control (PSCs);
- all new registered company directors and PSCs; and
- those filing documents with the Registrar.
The rationale is that this will make it much harder to register fictitious directors or PSCs of companies and to make anonymous or unauthorised filings at Companies House.
When will the new identification regime begin?
The new regime is intended to be available to existing directors and PSCs for voluntary verification from 8 April 2025.
Then, from a date in Autumn 2025, identity verification will become compulsory on incorporation for new directors and new PSCs. At the same time, a 12-month transition period will begin for existing directors and PSCs, at the end of which verification will be compulsory for all directors and PSCs.
By Spring 2026, identity verification will be required for those filing any document on behalf of a company, and third-party agents (e.g. law firms or accountants) filing on behalf of a company must be registered as an authorised agent.
Once the regime is fully implemented, any person filing documents at Companies House on behalf of a company will need to verify their identity before the Registrar will accept any documents from them. Importantly, directors who have not verified their identity will not be allowed to act as a director.
How do you verify your identity with Companies House?
There will be two ways of verifying someone’s identity:
- Direct verification: a person can open an account with Companies House and verify their own identity directly. Further details on the options for direct verification are set out below.
- Indirect verification: a person can use an Authorised Corporate Service Provider (ACSP) (such as accountants or a law firm) that will check their identity and then submit a statement to Companies House.
Options for direct verification.
Individuals will need to register an account with Companies House and then use the GOV.UK One Login to verify their identity using their ID documents, such as a passport.
There are three methods to prove your identity with GOV.UK One Login:
- With the GOV.UK Check app – individuals will need a form of UK ID (driving licence, passport, biometric residence permit (BRP), biometric residence card, Frontier Worker permit) or a non-UK passport with a biometric chip and a phone with a working camera that will allow the individual to take a selfie.
- By answering security questions online – individuals will need to answer security questions about things like their mobile phone contract, and any bank accounts, credit cards, loans or mortgages they may have. The individual will also need UK photo ID such as a UK passport or a UK driving licence.
- At a Post Office – individuals will be asked to enter details from their photo ID on GOV.UK and go to a Post Office that offers ‘in branch verification’ where the individual’s photo ID will be scanned and a picture of the individual will be taken. The individual will then be updated on the result of their check by email. This route will be available for individuals with the following ID: UK and non-UK passports, UK and EU driving licence, UK BRP or national identity photocard from an EU country, Norway, Iceland or Liechtenstein.
What should I do to prepare?
- Ask your directors, any PSCs and persons filing documents on behalf of your company if they have up-to-date identity documents available so they can be prepared to verify their identity when the new identification regime becomes available.
- Keep an eye out for further information from us. We will provide you with more detail as and when the identification regime become voluntarily available to directors and PSCs.
- Once available, we recommend existing company directors and PSCs verify at Companies House as soon as possible and well in advance of it being a mandatory requirement to do so.
You might also want to read the other blogs in our series so you are up-to-date:
- Our first blog gives an overview of the main reforms being brought in under the Act.
- Our second blog explains the initial raft of changes that came into force on 4 March 2024 including new procedures for companies, as well as new powers for Companies House.
- In our third blog, we outline the expected timetable for the remaining reforms to be brought into force. The timetable is dependent on suitable Parliamentary time and is being kept under review by the government.