By Laura Weir, Associate Director at RMT Accountants & Business Advisors Ltd.
In recent years, there has been a clear shift towards greater transparency around who owns and controls UK businesses, as regulators work to reduce the risk of fraud and misuse.
That focus will intensify this November, when new identity verification rules come into force, placing fresh responsibilities on company directors.
The Economic Crime and Corporate Transparency Act (ECCTA) is new legislation introduced by the government to improve corporate transparency and reduce fraud within UK businesses. It requires company directors to take proactive steps to ensure ongoing compliance.
At present, businesses are required to submit an annual return to Companies House, providing key information about their structure and ownership.
However, from 18 November 2025, all company directors, persons with significant control (PSCs), and anyone involved in setting up, running, owning, or controlling a company will be required to verify their identity with Companies House each year.
They will also need to confirm that their purpose is lawful both upon incorporation and within their annual confirmation statement.
The Registrar of Companies will have enhanced powers to query these statements and remove any false or inaccurate information from the register.
A new system of financial penalties for non-compliance with identity verification and filing requirements will also be introduced as part of the legislation. Fines will be tiered based on the severity of the offence or the company’s previous reporting record.
Penalties will start at £250 for minor offences and £500 for serious offences, rising to £1,500 or £2,000 for repeat offenders.
Laura Weir, associate director at RMT Accountants & Business Advisors, says: “The ECCTA is designed to reform the role of Companies House and strengthen transparency across UK businesses, giving it a greater part to play in both tackling economic crime and supporting growth.
“From a day-to-day business administration perspective, these changes mean all businesses must take proactive steps to ensure they remain compliant, with the new penalties providing a clear incentive to do so.
“We’re encouraging our clients to get ahead of the new requirements now, before they become mandatory, to avoid last-minute pressure and potential delays in updating company records.”
If you would like further information on the new company verification process, or if you’re unsure how these changes will affect your business, please contact RMT Accountants & Business Advisors at advice@r-m-t.co.uk or call 0191 256 9500