Letter to Directors Regarding ID Verification

The introduction of identity verification is one of the key changes to UK company law under the Economic Crime & Corporate Transparency Act 2023 (ECCTA). Directors will need to be ID verified to act under the provisions of the ECCTA and there will be potential civil and criminal penalties for failure to do so. The voluntary period for identity verification (IDV) opened on 8th April 2025. IDV applies to directors irrespective of their nationality or where they are resident.

The ECCTA gives Companies House new and enhanced powers to help disrupt economic crime and the IDV regime is a key component of this.

Once fully implemented, it will no longer be possible to register an appointment of a director at Companies House nor for that director to act, until they have been ID verified. Existing directors will also need to be ID verified to continue to act and there are also new rules for corporate directors.

This template letter from a company to its directors, outlines in broad terms the IDV regime. This should enable directors to understand what the regime is, the timescales involved and the steps that both they and the company need to undertake in preparation. 

Companies House (March 2025) issued its intended implementation timetable for much of the rest of the ECCTA that is not yet in force; this includes the IDV regime. The regime will be implemented in phases and has now commenced with voluntary IDV (from 8th April 2025) and is expected to be completed by the end of 2026. This letter has been updated to reflect this timetable and the transition period that will see more than 7 million people going through enhanced checks. Given the intended timeline, for companies that have not already done so, communicating with directors is now a matter of some importance and urgency. This letter is a good starting point. This letter encourages directors to take advantage of early verification. Verifying early means that if complications arise there is less likelihood of missed deadlines and potential fines for non-compliance as well as being ahead of the vast bulk of people that will be ID verifying once the regime becomes compulsory.

Companies House guidance in relation to the IDV process is available here.

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