Act now to ensure compliance with new rules on ID verification

The new rules will come into force on 18 November 2025, requiring all directors of UK companies and overseas companies with UK establishments to have their identity verified to act in their roles. This requirement also applies to new company incorporations – no director can be appointed without prior ID verification. Existing directors must complete IDV before submitting their company’s first confirmation statement after the rules take effect in November 2025. Initially, IDV status will have to be confirmed for every directorship, but future updates to Companies House systems may streamline this process so IDV status flows automatically to multiple directorships and PSC positions.

The IDV process is designed to be a one-off requirement, although Companies House retains the authority to request re-verification if fraudulent activity is suspected. Failure to comply is a criminal offence, potentially resulting in fines and disqualification under the Company Directors Disqualification Act 1986.

PSCs are also subject to the new IDV rules. Individual PSCs must verify their identity, and for relevant legal entities (RLEs), such as other UK companies, a designated officer must complete the process. While companies are not responsible for ensuring PSC compliance, full adherence is encouraged. Companies House may issue notices or set deadlines for PSCs to comply during a transitional period.

By 2026, anyone filing documents with Companies House must also undergo ID verification, unless filing through an Authorised Corporate Services Provider (ACSP).

There are two primary routes for ID verification. The first is through Companies House, which offers a free and efficient service for individuals with biometric passports. The process, accessible via the GOV.UK One login system, takes about five minutes and requires an email address, home address, full name, date of birth, and supporting documents such as a biometric passport or UK driving licence. A personal code is issued upon completion, which should be securely stored.

The second route is through ACSPs, which offer broader document acceptance and cater to individuals without biometric passports.

Companies House will eventually display IDV status on the public register, enhancing transparency. ACSPs must also declare IDV completion, which will be publicly visible.

Non-compliance carries serious consequences. Directors acting without verified ID commit a criminal offence, and companies allowing such actions may face penalties. Although unverified directors can still legally bind the company, market practices may evolve to limit dealings with companies lacking ID verified leadership.

To prepare, companies should:

• Inform all directors of the IDV requirement and necessary documentation;

• Identify directors needing ACSP services and arrange verification;
• Encourage early IDV completion;
• If using the Companies House route, ensure directors record and share their personal codes with the relevant internal teams responsible for Companies House filings;
• Update HR and company secretarial procedures.
• Notify PSCs of their obligations and identify responsible officers for RLEs.

The ECCTA represents a pivotal shift in corporate governance, reinforcing the UK’s commitment to transparency and economic integrity. Companies are urged to act now to ensure compliance and avoid future disruptions.

Paul McLaughlin is a Partner, Brodies LLP