Next stage of Economic Crime and Corporate Transparency Act- Impact on businesses
After receiving Royal Assent in October 2023, the Economic Crime and Corporate Transparency Act 2023 (ECCTA) has been coming into force in stages, with the next stage of mandatory ID verification to be phased in and impact businesses from 18 November 2025. Alex Hall, legal director in the Corporate Law team at Blacks Solicitors discusses the next stage of changes and the impact this will have on UK businesses.
The law
The ECCTA marks a major overhaul of the UK’s corporate regulatory framework, creating a strengthened role for Companies House. It includes the introduction of stricter requirements for data accuracy, more powers for Companies House to investigate and take action, and stronger enforcement to combat fraud. Some of the key changes already in effect include:
Greater investigative powers for Companies House to ensure the public register is accurate.
Rules for rejecting company names have been expanded to those that may be misleading regarding the company’s operations or could be used to facilitate fraud.
Regulated professionals such as law firms and accountants have been invited to register as Authorised Corporate Service Providers (ACSPs), which will enable them to file documents and verify identities on a client’s behalf.
Autumn 2025 changes
On 18 November 2025 significant new measures will be brought in to verify individuals’ identities. Identity verification will become mandatory as part of all new company incorporations, and for newly appointed directors and People with Significant Control (PSCs).
A 12-month transition period will also begin, during which over seven million existing directors and PSCs must verify their identity. Verification will be required as part of the annual confirmation statement. Identity verification can be carried out using the Companies House online portal, at a Post Office or via an ACSP.
What will this mean for businesses?
Whilst the autumn changes focus on prospective companies, they will also impact existing incorporated businesses, their directors and shareholders. Previously, legislative updates centred on setting up new companies correctly, however, owners must now meet ECCTA’s identity verification requirements.
Non-compliance can lead to unlimited fines, criminal charges or even imprisonment. Business owners should ensure that they, their teams, and their advisers fully understand the requirements and are ready to respond swiftly to maintain compliance and avoid potential penalties.
What is next?
After November, the next implementation stage is set for spring 2026, when:
A mandatory requirement for all presenters (those filing documents at Companies House on behalf of a company) to have their identity verified in the same way as all directors and PSCs will be introduced.
A mandatory requirement for all third party agents filing on behalf of companies to be registered as ACSPs will be introduced.
New powers for Companies House to reject documents delivered by disqualified directors, unless they are delivered by an ACSP for specified filings permitted by law, will be introduced.