Less than 90 days to get your house in order for Companies House ID changes 

In less than 90 days, one of the most significant identity verification changes in Companies House history will come into force. All company directors and persons of significant control will have to verify their identity either directly with Companies House or via an Authorised Corporate Service Provider (ACSP). 

 For the UK’s six million registered directors, non-compliance could mean operational restrictions and financial penalties.  

 Since April, Companies House has permitted individuals to verify their identities directly with them or via an ACSP on a voluntary basis. All new directors will need to verify their identity from November 18th, while existing directors will be given a 12-month transition period. The move follows the introduction of identity verification (IDV) to UK company law in 2023 which gave Companies House new powers to tackle economic crime.  

 With these changes, the need for IDV technology and platforms is expected to rocket, majorly impacting ACSPs such as accountants and formation agents. This is because professional service providers (like accountants and solicitors) must register as an ACSP to conduct identity checks and submit them to Companies House. And not only must ACSPs adapt to the new regulations, but they must also continue to meet existing anti-money laundering (AML) obligations as well.  

 But why are the changes taking place? And how can ACSPs and directors get their house in order for the changes?  

 A new era for ID verification 

 The changes to make the IDV process mandatory for company directors and PSCs are part of a raft of changes aiming to combat fraud and financial crime. They will give Companies House the ability to accurately understand who is setting up and controlling companies in the UK. They follow broader changes to strengthen IDV processes, such as the rollout of digital IDs, which the government is releasing in stages this year to allow people to perform IDV for government services using the Gov.UK wallet. It’s possible we could see a crossover between the two areas.   

 Companies House says the changes mean “companies of all sizes will benefit from more accurate and trustworthy register data and greater protections against fraud”. And it should create more trust and accuracy in know your customer (KYC), customer due diligence (CDD) and Anti-Money Laundering (AML) processes.  

 However, unless individuals decide to complete the process directly with Companies House, they will have to go through an ACSP. They provide an easier way for directors and business owners to comply. But for these ACSPs, the changes represent another compliance task to handle – if not performed correctly, non-compliance could bring operational restrictions and financial penalties. 

 So, what steps do ACSPs need to complete to verify directors?  

 The role of ACSPs in verifying directors 

 Companies House requires ACSPs to gather, verify and keep various information from clients and then register it with them.  

 The first two steps are an information gathering process. This includes asking for information about the person, such as their current and former names and addresses, and getting evidence like official documents to verify the person’s identity. Then come the vital verification stages.  

 First, ACSPs need to check that the evidence is real. ACSPs can do this in person – for this, they need to prove they have staff who have been trained to carry out this process manually. Or, they can use IDV technology provided by a certified identity service provider (IDSP), which itself has to be proven sufficient in verifying documents using biometric or cryptographic features.  

 Second, they must check if the identity is real and belongs to the person who is claiming to be it. This happens by comparing the evidence submitted with the information and details known about the individual. They then need to maintain identity checks records for seven years.  

 The crucial decision for ACSPs to make is whether to conduct the IDV process manually, which will require gathering physical ID documents in person, or to integrate digital tools to help carry out the process. While both are viable options, the use of manual processes could lead to a major backlog before the deadline – and this creates further inefficiencies, costs and reputational damage.  

 How digital IDV solutions can help 

 With mandatory checks set to surge, ACSPs will need to contact their entire client bases to ensure they complete the necessary IDV steps. Dealing with this uptick in activity while still ensuring compliance with existing AML regulation will be a time-consuming and complex task without the right tools. Digital IDV solutions present an effective and cost-efficient answer. But what features should ACSPs look out for?  

 First and foremost, it’s important to use IDV technology that comes from a certified IDSP. If the supplier isn’t certified under the government trust framework, the technology won’t be legitimate for use in the IDV process.  

 Providers should be well aware of the changes and have incorporated new checks to streamline the compliance process by combining these new Companies House standards with existing AML regulation. This includes providing the option to carry out bulk invites, whereby ACSPs send out verification requests to their entire client base without needing to contact them directly, meaning they can keep operations ticking over while mitigating disruption to services.  

 Finding solutions that can provide this dual compliance approach means ACSPs will be able to conduct their compliance regime with more confidence and significantly lower their admin burden. And given the number of new IDV checks required, ACSPs should make sure the platform has the ability to remediate false positives efficiently.  

 Of course, these solutions should also come with effective AML features like facial biometric recognition and integration with public databases to allow ACSPs to effortlessly carry out checks like IDV, bank account verification and sanctions screening.  

 Getting your house in order 

 The countdown to mandatory identity verification is already underway, and with less than three months to prepare, both directors and ACSPs must act now. 

 For directors, the message is simple: verify early to avoid disruption. For ACSPs, the challenge is greater – balancing new Companies House obligations with existing AML duties while keeping operations efficient. 

 Those who invest in the right digital IDV solutions will be best placed to manage demand, protect their clients, and reduce compliance risk. In short, now is the time to get your house in order. 

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