What Accountants Need to Know About Identity Verification

Key insights for accountants from Julia Penny’s latest webinar

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) mark the most significant shake-up of UK company law for decades, directly impacting accountants, bookkeepers, and company secretaries.

At a recent Bright webinar, Julia Penny, past President of the ICAEW and a well-regarded expert in anti-money laundering (AML) and compliance, broke down what accountants need to know ahead of the new regulations coming into force from late 2025 and throughout 2026, and how your firm can not only stay compliant but also thrive in this new regulatory era.

In this article, we’ll recap the essential takeaways from Julia’s session, offer practical steps you can take now, and highlight the unique opportunities that ECCTA brings to forward-thinking accountancy practices.

ECCTA 2023: What’s changing and why does it matter?

“The Act has three key objectives: to prevent criminals and fraudsters from abusing the UK’s open economy, to strengthen the broader response to economic crime, and to enable Companies House to deliver a better service and improve data reliability for UK companies.”

The UK government introduced ECCTA in response to increasing concerns over economic crime, financial transparency, and the use of UK companies as vehicles for illicit activity. The Act toughens up requirements for UK companies around disclosure, director responsibilities, and critically, the way accountants and other agents interact with Companies House and their own clients.

The main objectives are clear:

• To prevent wrongdoing and economic crime

• To improve the reliability and quality of information held on public registers

• To empower Companies House with new investigative and enforcement powers

• To make company ownership and activity more transparent

For accountants, these changes mean a new compliance landscape, where diligent record-keeping, identity checks, and accurate reporting aren’t just good practice but are now firmly embedded in law and subject to stricter penalties for non-compliance.

Identity verification: the new compliance cornerstone

Perhaps the most headline-grabbing change is the introduction of mandatory identity verification for directors, persons with significant control (PSCs), LLP members, and anyone filing on behalf of a company.

This measure will become compulsory for new incorporations and director appointments on 18 November 2025, with a 12-month transition window for existing companies and directors to comply.

What does this mean for accountants?

• Accountants and bookkeepers who act as agents (often referred to as Authorised Corporate Service Providers or ACSPs) will play a central role in verifying client identities.

• Only those who are registered for AML supervision in the UK will be eligible to become an ACSP.

• Clients can choose to verify their identity directly via Companies House, or through their ACSP, who can use identity verification software such as Inform Direct to carry out compliant checks and streamline the process.

• A unique identifier (UIN) is issued following successful verification, which must be supplied when filing documents, a major change from the current process.

• Education for staff and clients is essential, as any errors or delays in verification can result in rejected filings or even criminal liability.

“ID verification will be required for all directors, persons with significant control (PSCs), and members of LLPs from 18 November 2025, with a mandatory 12-month transition for existing companies.”

Opportunities: how accountants can add value

Julia Penny highlighted that these compliance changes aren’t just a regulatory hurdle, they’re also a business opportunity. Clients, especially SME directors unused to digital ID checks and regulatory requirements, may seek reassurance and support from trusted advisers.

What can accountants do?

• Offer identity verification as a managed service, using your expertise to guide clients through checks, document collection, and submission. This new service can generate additional revenue and strengthen client relationships.

• Update your practice’s messaging and marketing: let clients know you are ACSP-registered and can manage ECCTA compliance on their behalf.

• Use ECCTA as a conversation starter around overall business health, robust controls, and the wider importance of financial transparency.

Enhanced Companies House powers and digital transformation

From March 2024 onwards, Companies House has started exercising new query, rejection, and data-sharing powers, including:

• The ability to challenge and remove inaccurate or suspicious information from the register

• Obligations for companies to supply a registered email address and confirm lawful activity annually

• Cross-referencing data with law enforcement to spot and prevent wrongdoing

By 2026, all filings (including annual accounts) must be delivered via digital software, and those filing must have their identity verified. These changes further encourage the digitalisation of accounting services.

Practical tips: getting ready for the new world

“Companies House will be able to verify identity, or Authorised Corporate Service Providers – such as accountants or lawyers – may offer this service to clients.”

Here are Julia Penny’s actionable recommendations for accountants preparing for ECCTA compliance:

1. Assess your processes now.
   Review how you collect, store, and verify client ID. Make sure your systems are digital and, if possible, integrated with your practice management tools to help manage the administrative workload.

2. Register as an ACSP (if you haven’t already).
   Ensure your AML supervision is current and valid – only registered firms can be Authorised Corporate Service Providers.

3. Communicate early and often with clients.
   Educate clients on the new requirements, timelines, and potential penalties if they don’t comply. Use newsletters, webinars, and one-to-one calls to keep them informed.

4. Update engagement letters and internal policies.
   Include references to ECCTA compliance and your role in ID verification for corporate clients.

5. Invest in staff training.
   Keep the whole team up to speed on new verification procedures, risk assessments, and best practices in recording and monitoring client data.

6. Offer identity verification as a service using digital tools.
   Consider providing identity verification for your clients using solutions like Inform Direct, which offer ECCTA-compliant checks and can help you efficiently meet your obligations as an ACSP.

7. Use digital tools to streamline compliance.
   Software like BrightManager and related platforms can help manage workflows, record-keeping, and AML checks, making compliance less of a burden and more of a value-added service.

“If a person, rather than technology, is checking documents, they must be trained by a specialist provider in detecting false documents. You must check for signs of tampering, ensure the person matches the photo, and confirm the documents appear authentic.”

What happens if you don’t comply?

“There’s a risk of getting muddled between AML and IDV requirements. You need to ensure training on document checking is appropriate, manage clients’ expectations about these new requirements, and consider how the costs of IDV will be recovered.”

Failure to adhere to ECCTA’s requirements exposes firms and their clients to significant legal, financial, and reputational risks, including:

• Criminal offences for unverified directors or the use of “unverified” filings

• Civil penalties and rejected company formations

• Difficulties providing essential business services for non-compliant clients

Closing thoughts: turning compliance into competitive advantage

“Clients may be happier doing everything with you and may expect you to handle IDV for them. That creates an opportunity to charge an extra fee for the IDV service.”

The next 12 months are set to be a period of rapid change for the accounting profession. Those who get ahead now by embedding digital ID checks, training staff, and positioning themselves as ECCTA experts are best placed to win new clients, deepen relationships, and strengthen their practice.

“You need to decide: Are you going to offer an IDV service for clients? If so, how much and how will you charge? Will you use identity verification technology, or train someone in-house?”

Don’t wait for deadlines to approach. Start preparing today, and help your clients navigate the UK’s biggest company law revolution in over a century.

Want more detail?
Watch the full webinar with Julia Penny via the Bright website here: https://brightsg.com/webinar/eccta-and-its-impact-on-accountants-and-aml-procedures/

Frequently Asked Questions about the ECCTA, Identity Verification, and ACSPs

1. Who needs to complete identity verification under the ECCTA?
   All company directors, persons with significant control (PSCs), LLP members, and anyone filing documents at Companies House unless they are an Authorised Corporate Service Provider (ACSP) must complete identity verification. These requirements apply to both new appointments from 18 November 2025 and existing roles during the transition period.

2. What is an Authorised Corporate Service Provider (ACSP) and how do I become one?
   An ACSP is a regulated firm (such as an accountant or company formation agent) registered and approved by Companies House to file documents or carry out identity verification on behalf of clients. To become an ACSP, your firm must have UK AML supervision, complete the Companies House ACSP registration, and keep up with ongoing compliance and staff training.

3. How does identity verification work and what tools are available?
   Identity verification can be completed directly via Companies House or through an ACSP. Most ACSPs use digital tools and software (such as Inform Direct) that can conduct biometric or document-based ID checks securely and efficiently, meeting the latest ECCTA requirements.

4. What happens if my firm or clients don’t comply with the new ECCTA requirements?
   Non-compliance can result in severe penalties, including rejected filings, financial penalties, loss of ACSP status, or even criminal prosecution for directors. Delays or mistakes with identity verification could mean serious disruption to statutory filings or company administration.

5. How do ECCTA identity verification requirements differ from regular AML checks?
   AML checks are risk-based and focus on understanding your client and ongoing monitoring, while ECCTA ID verification is a mandatory, rules-based process for all relevant parties, regardless of risk profile. Under ECCTA, all directors, PSCs, and similar roles must be verified, not just on a risk-sensitive basis as with AML.

6. What practical steps should accountants take to get ready for ECCTA?
   Assess your current onboarding and ID collection processes, register as an ACSP if not already, use digital identity verification tools, clearly communicate upcoming changes to clients, update internal policies, and provide staff training to ensure full compliance by the relevant deadlines.

This article is intended for information only and not legal advice. For specific guidance, consult a compliance expert or your professional body.

This content may have been developed with the assistance of AI tools. Content is reviewed by a member of the Bright team before publication. Guidance on legislation can be obtained from your industry body.