The Economic Crime and Corporate Transparency Act (ECCTA) is bringing some of the most significant changes to UK company law in decades. If you are a company director, a person with significant control (PSC), or involved in running a limited company in any capacity, these changes will affect you directly.
Here is a practical guide to the two biggest areas of change: mandatory identity verification and new rules for filing company accounts.
Mandatory Identity Verification
From 18 November 2025, identity verification became a legal requirement for anyone setting up, running, owning, or controlling a company in the UK. This is not a deadline to complete verification by. Rather, it marks the start of a 12-month transition period, giving companies time to ensure all relevant individuals have verified their identity by their due dates.
Who Needs to Verify?
The requirement applies to:
From no earlier than November 2026, identity verification will also be introduced for people who file documents at Companies House. Corporate directors and officers of corporate PSCs will be required to verify at a later date, yet to be confirmed.
How to Verify Your Identity
There are two routes to verify your identity:
1. Directly with Companies House - you can verify through GOV.UK One Login using identity documents such as a passport. This is a digital process that matches a live image to your identity document.
2. Through an Authorised Corporate Service Provider (ACSP) - these are individuals or organisations that carry out anti-money laundering supervised activities, such as accountants, solicitors, and company formation agents. ACSPs registered with Companies House from 18 March 2025 can verify identity on your behalf. The checks must meet the same level of assurance as direct verification.
What Happens If You Do Not Comply?
Failing to verify your identity on time is a criminal offence. The consequences include financial penalties and the inability to make any filings for your company or to start a new company. This is a significant change from the previous regime, where identity checks were minimal.
Changes to Company Accounts
Alongside identity verification, Companies House is also reforming how companies file their annual accounts. While the timeline for some of these changes is still being finalised, the direction of travel is clear.
Software-Only Filing
In the future, all company accounts will need to be filed using commercial accounting software. Web-based and paper filing options will eventually be withdrawn. This change is designed to improve the quality and consistency of data on the Companies House register.
The original target date of April 2027 for this change has been paused and is currently under review. Companies will receive at least 21 months' notice before the change takes effect. However, most companies can begin preparing now, as commercial accounting software is already widely available.
Changes for Small and Micro Companies
The filing requirements for smaller companies are being expanded:
These changes mean that more financial information will be publicly available on the Companies House register, improving transparency for creditors, investors, and other stakeholders.
Audit Exemption Changes
Companies claiming an audit exemption will need to provide an enhanced statement from their directors on the balance sheet. Directors will need to specify which exemption is being claimed and confirm that the company qualifies.
Other Notable Changes
Several other changes have already taken effect or are in progress:
What Should You Do Now?
If you are a company director or PSC, the most immediate action is to verify your identity. You can do this directly through GOV.UK One Login or through your accountant if they are registered as an ACSP. Do not leave it until the last minute, as the November 2026 deadline for existing directors will come around quickly.
For accounts filing, speak to your accountant about transitioning to software-based filing if you have not already done so. Even though the mandatory date has been delayed, making the switch now will ensure you are prepared when the requirement comes into force.
At Paxford Finance, we believe that staying on top of your compliance obligations is an important part of running a healthy business. If you need finance to invest in your business while navigating these changes, we are here to help. Apply online or call us on 0333 0506 285.