ECCTA 2023: ID Verification for Directors & Early Registration Benefits

One of the most significant reforms introduced by the Economic Crime and Corporate Transparency Act 2023 (ECCTA) is the need for company directors and Persons with Significant Control (PSCs) to be identity verified (IDV).

This new obligation to help prevent economic crime is a compliance paradigm shift for UK companies. That is why it is worth learning the basics of this and understanding the role you have to play.

Learning About the ID Verification Obligation

All existing and newly appointed company directors need to undergo ID verification, and so do those falling in the PSC category. Officers of companies that have been registered as PSCs are also included in this provision. This has been brought in by the government as part of a full-fledged strategy to promote corporate transparency and reduce frauds.

Voluntary Registration Timeline

The Government has set 8 April 2025 as the compulsory date for voluntary ID verification. Directors and PSCs are now free to voluntarily verify their identity before the requirement is made compulsory. This helps companies prepare ahead of time and avoid experiencing any delays in compliance.

How to Verify Your Identity

There are two main ways of accomplishing the ID verification process:

1. ID Verification through Companies House

Companies House verification service offers an easy method of making ID checks. To use the service, an individual must:

• Have an internet connection and an email account specifically
• Be a registered user for Companies House Services
• Provide supporting identity documents

Verification is performed via the GOV.UK One Login platform using any one of the below options:

• ID check mobile application
• Web service verification
• Personal verification at the Post Office (appointment booking required)

Candidates need to submit principal personal details such as their complete name (in case any prior names have been employed), birth date and residence address history. Biometric passports, driving licences, or resident permits as per The Registrars' (Identity Verification by the Registrar) Rules 2025 are recognised identification documents.

The service is cost-free and offers an uninterrupted stream for persons possessing biometric ID documents.

2. ID Verification by an Authorised Corporate Service Provider (ACSP)

Alternatively, directors and PSCs can verify themselves by way of an ACSP, for instance, an accountant, law firm or company secretarial business. The application to become an ACSP opens on 18 March 2025, but the processing timeframe is not certain.

Not all ACSPs will offer ID verification services, and if they do, there may be a fee attached. Businesses must assess their options before deciding which type of verification process would be best.

What Happens After Verification

Once successful ID verification is completed, the director will be assigned a unique identifier number. This will be utilised for all future and existing directorships. This exercise will be a one-off unless Companies House requires re-verification.

For compliance, businesses should:

• Inform all the directors and PSCs of the new ID verification requirement
• Encourage voluntary registration before the mandatory phase begins
• Ensure directors possess the required identity documents

Pre-verification will allow companies to avoid last-minute compliance issues and streamline the process prior to future confirmation statement filings.

Conclusion

The new ID verification within ECCTA 2023 is a complete shift in company leadership. Voluntarily registering from April 2025, directors and PSCs can stay current with up-to-date regulations and comply with minimal disruption. With the emphasis on transparency and fraud protection, companies should act ahead of time and prepare to satisfy these new requirements.