Companies House has announced the introduction of an identity verification (IDV) system for early this year, which was initially promised in the Economic Crime and Corporate Transparency Act 2023, bringing about some of the most significant changes to Companies House since its formation.
These changes will be introduced in stages and are expected to affect more than 7 million individuals, by bringing in a requirement for all directors and people with significant control (PSCs) to be “verified” by Companies House by the end of 2026.
This 3-minute read aims to cover your key questions in preparation for the changes expected in the coming months.
Why?
Companies House hopes that the IDV system will make the UK companies structure more transparent and prevent the abuse of UK companies by unscrupulous individuals. This should in turn increase the security and credibility of legitimate UK companies.
What is the IDV system and who will it affect?
The IDV system will apply to all new and existing UK companies registered at Companies House. Directors, PSCs, Company Secretaries and anyone submitting filings on behalf of a registered company will be required to verify their identity either through an Authorised Corporate Services Provider (ACSP) or directly through Companies House.
Professionals such as Solicitors, Accountants and Trust and Company service providers will need to register as ACSPs in order to verify individuals’ identity, and to complete filings on a company’s behalf.
When will the changes come into effect?
Companies House has provided a roadmap for the rollout of the IDV system, including the expected timescales for the introduction of an IDV app available online through Companies House. Here is what to expect over the next 24 months:
- Spring 2025:
Professionals such as Solicitors and Accountants will be able to register as ACSPs, allowing them to carry out identity verification services on behalf of clients whilst the IDV app is in development.
In practical terms, this will mean that we as your solicitors will need to hold ID documentation for all Directors and significant shareholders (PSCs) of your company before we can complete filings for you.
- Autumn 2025:
Companies House expects to roll out an identity verification app for individuals through their website, enabling directors, PSCs and anyone else submitting filings for a company to verify their identity online.
This will mark the beginning of a 12-month transition period during which existing companies, as part of filing their annual confirmation statements, must ensure that all Directors and PSCs have verified their identity either through an ACSP or directly with Companies House.
IDV will become a compulsory part of the incorporation process for new companies and for the appointment of new Directors and PSCs.
- Spring 2026:
IDV will be compulsory for anyone wanting to file documents with Companies House, including confirmation statements and annual accounts. All third-party agents filing for a company will need to have registered as an ACSP and ensure that all Directors and PSCs have completed IDV before filing documents.
- End of 2026:
The final implementation stage and the transition period for existing companies will come to an end, and all Directors and PSCs for a company must be IDV verified by this deadline. Companies House will start compliance activity against individuals and companies who have failed to comply with the IDV requirements, which could include fines, inability to file key documents and even compulsory strike-off of the company.
What should I do to prepare?
While the exact timescales are not yet clear, the consequences of non-compliance for you and your business could be severe if you are caught unprepared. We would suggest getting a head start on compiling identity documents for key individuals early to avoid future stresses.
Our Corporate team are happy to help if you require any help or advice.
