The UK government’s recent Companies House reforms mark a significant shift in corporate governance, with identity verification at the heart of the changes. As part of the Economic Crime and Corporate Transparency Act, these reforms are aimed at enhancing the integrity of the UK’s company registration system.

For accountants – key players in managing company formations and compliance – the introduction of mandatory identity verification presents both new responsibilities and procedural changes.

The role of accountants in a new compliance landscape

1. Identity verification as a central task

One of the most prominent changes accountants must navigate is the introduction of mandatory identity checks for company directors, persons with significant control (PSCs), and anyone filing documents on behalf of a company. These reforms make it obligatory for accountants to ensure that their clients, whether new or existing companies, undergo this verification process. Accountants, who often facilitate company incorporations, will need to act as intermediaries, guiding clients through these new steps.

While the verification process is intended to be straightforward, it does add an extra layer of responsibility for accountants. Gathering the necessary identification documents, ensuring they meet the requirements, and submitting them through the Companies House system will now become a standard part of client onboarding and compliance management.

2. Changes to the incorporation process 

The ease of forming companies in the UK has been a hallmark of its business environment. However, with the introduction of identity verification, there will be some inevitable delays compared with previous processes. Accountants who assist clients with company formation will need to manage these new timelines effectively, as the verification of directors and PSCs must be completed before incorporation can be finalised.

This shift means that accountants must now incorporate identity checks into their workflows, ensuring that they collect all relevant documents before beginning the registration process. Communicating these changes to clients will be essential to avoid potential delays, especially for those clients who may not be familiar with the new requirements.

3. Onboarding and monitoring for existing companies 

For accountants working with existing companies, the new rules will have a lasting impact. Any changes to the structure of a company – such as the appointment of new directors or changes in PSCs – will now require identity verification. Accountants must ensure that their clients remain compliant, as any alterations to corporate governance will trigger the need for updated identity checks.

This adds a continuous element to the work of accountants, who will now need to stay vigilant about their clients’ corporate filings and any forthcoming changes that require verification.

Timelines for implementation

The following timeline outlines the intention for Companies House acquiring and using new powers:

By winter 2024 into 2025

Companies House should be able to:

• expedite the striking off of companies where the registrar has concluded the company has been formed for a false basis; and
• annotate the register in a wider range of circumstances, such as when a company has a director who has been disqualified but has yet to terminate their appointment on the register, or where Companies House has issued a statutory notice to require more information from a person, but the matter remains unresolved.

By spring 2025

Companies House should be able to:

• carry out checks on Authorised Corporate Service Providers (ACSPs) to authorise them to carry out verification services. ACSPs will be required to be registered in the UK and be subject to the UK’s anti-money laundering regime – this will inevitably include ICAEW members, and we will explore the ACSP requirements in further communications;
• allow individuals to voluntarily verify their identity; and
• receive and assess applications from individuals seeking to have residential addresses suppressed from public disclosure in certain circumstances.

By autumn 2025

Companies House should be able to:

• make identity verification a compulsory part of incorporation and new appointments for new directors and PSCs; and
• begin the 12-month transition phase to require more than seven million existing directors and PSCs to verify their identity – the identity verification will happen as part of the annual confirmation statement filing.

This period will be crucial for accountants, as the reforms will fully impact new incorporations, as well as existing companies when they undergo structural changes. Accountants must ensure that all relevant parties complete their verification before any official filings are made. They will need to work closely with Companies House during this time to handle any potential challenges in the transition.

By spring 2026

Companies House should be able to:

• make identity verification of the presenters a compulsory part of filing any document;
• require third-party agents filing on behalf of companies to be registered as an ACSP; and
• reject documents delivered by disqualified directors as they will be prohibited from doing so, unless they are delivered by an ACSP for specified filings permitted by law.

By the end of 2026

Companies House should be able to:

• require all limited partnerships to submit more information, providing greater transparency for users of the register;
• complete the transition period for all individuals on the register requiring identity verification, and start compliance activity against those who have failed to verify their identity;
• facilitate greater cross-checking of information and data between Companies House and other public and private sector bodies.

Resourcing for the future

The Companies House identity verification reforms represent a fundamental shift in the UK’s approach to company registration and corporate transparency. These changes will require a significant uplift in resources within Companies House itself and an upgrade to the internal processes, which will inevitably take time. Some changes will also require secondary legislation to implement, the timing of which will depend on the availability of Parliamentary time to pass. 

For chartered accountants, this means adapting to new compliance obligations, particularly in terms of verifying the identities of those in key positions within companies.

These changes will require some adjustments in the way accountants manage their workflows and client relationships, but they also present an opportunity to reinforce their role as trusted advisers in the evolving business landscape. 

By staying ahead of the reforms and integrating the identity verification process smoothly into their practices, accountants will help their clients navigate these new requirements while maintaining compliance with the latest regulations. We welcome these changes, and ICAEW looks forward to supporting our members to fulfil their new obligations and reduce the abuse of Companies House.