Companies House and its new identification requirements
A significant change will come into force from 25 March 2025 for directors/trustees and persons with significant control (PSCs) of academy trusts which are registered with Companies House.
Identity verification (IDV) is a key measure brought in by the Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023). This means that Companies House will require anyone running or controlling an academy trust company in the UK to verify their identity to prove they are who they claim to be—irrespective of their nationality or where they are resident.
The requirements are part of a wider deterrent aimed at preventing false and misleading information being used and using entities as part of a legitimate front for illegal economic crime activities.
Who will be required to have their identity verified?
The IDV requirements will apply to entities that are registered with the Register of Companies. For companies, this will include all types of limited companies, including companies limited by guarantee, which applies to academy trusts.
The IDV requirements will apply to all directors, PSCs and those acting on behalf of entities.
IDV will need to be undertaken for all existing and all new individuals associated with entities.
When will the new requirements come into effect?
The new requirements will be implemented in phases.
From 25 March 2025, individuals will be able to verify their identity on a voluntary basis.
By Autumn 2025, identity verification will be made compulsory for new directors and PSCs when incorporating a new company, and a twelve-month transition period will begin in respect of existing directors and PSCs.
By Spring 2026, identity verification will be required for presenters and third-party agents filing on behalf of a company (who must also register as an ACSP).
By the end of 2026, the transition period will be completed and Companies House will begin compliance activity against those who have failed to verify their identity as required.
How will identities be verified?
There are two routes to have IDV carried out: directly with Companies House or via an Authorised Corporate Services Provider (ACSP).
Directly with Companies House
Individuals will be able to do this through GOV.UK One Login. There are three ways to prove identity with GOV.UK One Login: either using the GOV.UK ID Check app; by answering security questions online; or by taking documents to a Post Office. The method most likely to be convenient will depend on whether the individual has access to a mobile phone with a camera, or if they have photo ID and what type of photo ID it is.
With the GOV.UK ID Check app, documents such as a UK photocard driving licence, UK passport, non-UK passport with a biometric chip, UK biometric residence permit, UK biometric residence card or UK Frontier Worker permit can be used.
Direct verification will only be available to individuals who hold a biometric passport or documentation issued in certain countries (with the web service being limited to individuals with UK documents), and anyone without such documentation will need to verify via an ACSP.
The security questions that will have to be answered online cover things like the individual’s mobile phone contract, and any bank accounts, credit cards, loans or mortgages that they may have. In addition, details will be required from either a UK passport, a UK photocard driving licence or a current account with a UK bank or building society.
If using the Post Office, the individual will need to enter details from their photo ID on GOV.UK and then go to a Post Office that offers ‘in branch verification’ services where they’ll scan the photo ID and take a photo of the individual. Only a UK passport, non-UK passport, UK photocard driving licence, European Union (EU) photocard driving licence, or national identity photocard from an EU country, Norway, Iceland or Liechtenstein will be accepted as photo ID.
Authorised Corporate Services Provider (ACSP)
The other alternative is to use an ACSP to carry out the IDV. ACSPs are individuals or organisations such as company formation agents, solicitors, accountants, chartered secretaries and governance professionals who have registered as ACSPs with Companies House. ACSPs will also be known as Companies House authorised agents. IDVs carried out by ACSPs must meet the same level of assurance as those verifications made directly with Companies House.
Some academy trusts may find their third-party governance service has registered as an ACSP and offer this as an additional service.
What will be the implications of not being verified?
When ID verification becomes compulsory, an individual who acts as a director without having had their identity verified will commit an offence, although technically this will not affect the validity of their appointment as a director or their actions while unverified. There will also be an obligation on the company to ensure that an individual does not act as a director unless their identity is verified; contravention will be an offence subject to a fine. PSCs who do not comply with their new ID verification obligations will also commit an offence.
Impact on academy trusts
This will initially bring a significant administrative burden to academy trusts from the viewpoint of arranging for all trustees and members to undertake such a process. This is likely to become even more challenging where relevant persons are not comfortable with modern technology.
Where some trusts insist on in-person meetings, it might make sense to add some time to a meeting to verify all persons present in one go.
Sadly, there might be instances where trustees refuse to perform the checks. This is expected to be rare, but in these cases, trusts may need to consider terminating a trustee from their role to avoid not being compliant. This will bring trustee recruitment challenges to the fore even more.
In our opinion, it makes sense to look to get as many trustees and members verified voluntarily early on, given that each individual’s identify only needs to be verified once for all Companies House purposes. You can then focus your attention on the more challenging verifications.
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