ECCTA Update

ECCTA Update

As we have flagged in previous briefings, the phased implementation of the Economic Crime and Corporate Transparency Act 2023 ('ECCTA') is still ongoing.  

The latest phase relates to the introduction of ID verification for directors.  This affects all UK companies, including those operating schools, colleges and universities and their group entities.  It is important for these entities and their trustees to keep up-to-date with developments in implementation to ensure that they remain compliant with their legal and regulatory requirements.

Who needs to verify their identity?

The new rules require that various categories of person must verify their identity.  Those most likely to be relevant to charities are:

• new or existing directors of a UK company;
• new or existing individual persons with significant control ('PSCs');
• an identified 'relevant officer' of new or existing PSCs which are relevant legal entities (ie corporate PSCs); and
• anyone making filings at Companies House, such as a company secretary or an authorised corporate service provider (‘ACSP’).

Implementation

It has been possible voluntarily to verify the identification of certain individuals from April 2025.  However, from today, 19 November 2025, it has become compulsory to verify the identities of all new directors and PSCs on incorporation of a new company, and all existing directors and PSCs on submission of the annual confirmation statement.

Companies House currently anticipates bringing in further identification requirements in Spring 2026.

How does identity verification take place?

The relevant individuals must verify their identities in one of the following ways:

• online;
• in person at a post office; or
• through an ACSP

In most cases, the documentation required is one or two of biometric passport, UK photocard driving licence, UK biometric residence card or permit, details of a UK bank account with national insurance number and/or proof of address.  In all cases, an individual email address is required.

Upon successful verification, individuals will be issued a unique personal code identifier. This can generally be used on an ongoing basis to verify their identity for all relevant positions held. In most cases, the verification will only be required once, though exceptions may apply in circumstances such as name changes due to marriage or divorce.

Consequences of non-compliance

Breach of the requirements is an offence and may attract an unlimited fine on the individual concerned or, in the case of a company, on the company and/or its directors.

In the case of companies, an individual whose identity has not been verified will usually be prohibited from acting as a director.  Although such a breach will not invalidate their acts as directors, individuals should not act without verification as they risk disqualification.  Many charities' articles will also provide that conviction of a criminal offence is grounds for disqualification of a trustee.

A new criminal offence has already come into force of providing false, misleading or deceptive information to the Registrar of Companies ‘without reasonable excuse’. This will include where a false statement is made regarding identity verification.

Next steps for your organisation

We recommend that charities ensure that they are familiar with the requirements of ECCTA and begin preparing for compulsory identity verification as at the date of their next confirmation statement (or immediately for new incorporations or director appointments).  Withers can help with compliance, as well as with any questions your organisation may have about identity verification or the other requirements of ECCTA.

If you have any questions or concerns, please do not hesitate to get in touch with your usual Withers contact and we will be happy to help.