What must UK accounting firms check for Companies House identity verification?

What to take away

What the Economic Crime and Corporate Transparency Act requires

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) gives Companies House new powers to check and verify the identity of anyone who files, directs or controls a UK company. The Economic Crime and Corporate Transparency Act 2023: Factsheets - GOV.UK explain the provisions that underpin verification.

For accountants, the practical effect is that you can no longer file on behalf of a client without confirming that the people behind the company have verified their identity. This applies whether you file using Companies House WebFiling, software, or paper forms.

The Act also strengthens the role of Companies House as an active gatekeeper rather than a passive registrar.

ECCTA introduces a new requirement for directors, people with significant control (PSCs), and registered filers to verify their identity. The verification duty is ongoing: it is not a one-off exercise at incorporation. If a new director is appointed or a PSC changes, that person must verify before the change can be registered.

Accountants should treat verification as part of their standard client onboarding and annual compliance cycle. The rules align with existing anti-money laundering (AML) obligations, but they are separate and additional. You cannot rely on your AML checks to satisfy Companies House verification.

The Act also creates new offences for failing to comply, including civil penalties and criminal sanctions for directors who knowingly file false information. Accountants who file on behalf of clients may face rejection of filings and reputational damage if they do not check verification status.

Who must verify identity: directors, PSCs and registered filers

Second, every person with significant control (PSC) must verify. The PSC regime is already familiar to accountants through the People with significant control (PSCs) - GOV.UK guidance, which explains who qualifies as a PSC and what information must be recorded.

There are some exemptions. For example, individuals who are not directors, PSCs, or filers do not need to verify. But in practice, most people involved in running a company will fall into one of the three categories. Accountants should map their client base to identify who needs to verify.

For existing companies, the transition period means that current directors and PSCs will need to verify when they next file a confirmation statement or appoint a new director. New companies must verify at the point of incorporation. The verification status is recorded on the public register, so clients cannot avoid it.

Accountants should also consider the interaction with the Register of Overseas Entities. Overseas entities that own UK property must register and keep their beneficial owner information up to date. The people behind those entities may also need to verify under ECCTA if they are directors or PSCs of a UK company.

The Companies House identity verification process step by step

The verification process is straightforward but requires care. Companies House offers two main routes: direct verification through GOV.UK One Login, or verification through an authorised agent. The Verify your identity for Companies House - GOV.UK guidance sets out the steps.

Alternatively, an accountant can register as an authorised agent and verify clients' identities on their behalf. This requires the firm to be registered with Companies House and to meet certain conditions, including AML supervision. The AML supervision requirements are separate but relevant, as agents must be supervised for AML purposes.

For firms that file for many clients, becoming an authorised agent can streamline the process. But it also brings additional responsibilities, including record-keeping and reporting duties. Accountants should weigh the benefits against the compliance burden.

Filing deadlines for annual accounts and confirmation statements

Annual accounts and confirmation statements have fixed deadlines. For private companies, annual accounts are due nine months after the end of the accounting reference date. For public companies, the deadline is six months. Confirmation statements are due within 14 days of the end of the review period, which is usually 12 months after incorporation or the last confirmation statement.

The File your company's annual accounts with Companies House - GOV.UK guidance explains the filing requirements and deadlines. Late filing penalties apply: for private companies, a penalty of £150 applies if accounts are up to one month late, rising to £1,500 if more than six months late. Public companies face higher penalties.

Accountants must ensure that all directors and PSCs have verified their identity before filing. If not, Companies House may reject the filing. This can cause the company to miss its deadline, triggering penalties. Therefore, verification should be completed well before the filing deadline.

Confirmation statements also require a check that the PSC register is up to date. Any changes to PSCs must be notified, and the new PSC must verify their identity. The confirmation statement is not just a routine filing; it is an opportunity to ensure compliance.

For accounting firms, the workflow should include a verification check as part of the annual accounts preparation. The client acceptance process should include verification status, and the firm should have a system to track which clients have verified and which have not.

Onboarding checks UK accountants must run on new clients

When taking on a new client, accountants must run a set of checks that go beyond traditional AML. These checks should be documented and repeated periodically.

These checks should be part of a formal selection checklist for new clients. The firm should also consider whether to use an authorised agent to verify identities, or to require clients to verify themselves.

For existing clients, the firm should review verification status annually. If a director or PSC has changed, the new person must verify. The firm should also check that the client has filed its confirmation statement and annual accounts on time.

Accountants should also consider the risk of clients who are not verified. If a client refuses to verify, the firm may need to cease acting for them, as filing on their behalf would be impossible. This should be covered in the engagement letter.

The onboarding process should also include a check on the client's beneficial owners if they are an overseas entity. The Register of Overseas Entities requires overseas entities that own UK property to register and disclose their beneficial owners. Accountants should check whether the client is registered and whether the information is up to date.

Register of Overseas Entities duties for overseas-owned clients

Overseas entities that own UK property must register on the Register of Overseas Entities and keep their information up to date. The Register an overseas entity and its beneficial owners - GOV.UK guidance explains the registration process and ongoing duties.

For accountants, this means that if you act for an overseas entity that owns UK property, you must ensure it is registered. The entity must provide details of its beneficial owners, and those individuals may need to verify their identity under ECCTA if they are also directors or PSCs of a UK company.

The Register of Overseas Entities is maintained by Companies House. Overseas entities must file an annual update within 14 days of the anniversary of registration. Failure to comply can result in fines and restrictions on the entity's ability to deal with its UK property.

Accountants should include a check on the Register of Overseas Entities as part of their onboarding and annual compliance. This is particularly relevant for clients based in jurisdictions with opaque ownership structures.

The interaction between ECCTA and the Register of Overseas Entities means that accountants must be aware of both regimes. Verification under ECCTA is separate from registration on the Register of Overseas Entities, but both are part of the broader transparency framework.

Penalties, rejections and remediation when verification fails

If a director, PSC, or filer fails to verify, Companies House can reject filings. This can lead to late filing penalties for annual accounts and confirmation statements. Persistent failure can result in the company being struck off the register.

For directors, failing to verify is a criminal offence. Companies House can impose civil penalties, and in serious cases, directors can be disqualified. Accountants who file on behalf of unverified clients may also face penalties if they knew or should have known.

Remediation steps include: ensuring the individual completes verification as soon as possible; refiling rejected documents; and communicating with Companies House to resolve issues. Accountants should keep records of verification attempts and outcomes.

If a client refuses to verify, the accountant should consider whether to continue acting. The firm's engagement letter should include a clause allowing termination if the client fails to meet verification obligations.

Accountants should also review their professional indemnity insurance to ensure it covers ECCTA-related risks. The vendor due diligence process for accounting firms should include a check on verification compliance.

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