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2025 Update: Economic Crime and Corporate Transparency Act 2023
Paul Rabbette
As we step into 2025, the Economic Crime and Corporate Transparency Act 2023 brings several crucial updates aimed at enhancing corporate transparency, protecting personal information, and combating economic crime. These changes are set to impact businesses across the UK significantly. Here, we explore the key updates and their implications.
Identity Verification
One of the most significant updates is the introduction of mandatory identity verification for all new directors and People with Significant Control (PSCs). Starting in autumn 2025, these individuals must complete identity verification with Companies House.
New directors will need to verify their identities before submitting their incorporation application to Companies House, and Persons with Significant Control (PSCs) will be expected to verify shortly after incorporation
Verification can be completed directly through Companies House or through an Authorised Corporate Service Provider (ACSP), such as a company formation agent, accountant, or legal advisor.
This measure is designed to improve the accuracy of company records and prevent fraudulent activities. Existing directors and PSCs will have a 12-month transition period to comply with this requirement.
Suppression of Personal Information
From January 2025, individuals can suppress certain personal details from historical company documents. This includes home addresses particularly if these details are listed elsewhere on the register (e.g., if the address was previously a registered office) which can be replaced with a service address, dates of birth on any documents filed prior to 10 October 2015, business occupations, and signatures can also be suppressed.
This change aims to protect personal privacy and reduce the risk of identity theft, providing greater security for individuals involved in corporate governance.
Failure to Prevent Fraud
A new corporate offence of failure to prevent fraud will come into effect on 1st September 2025. Under this provision, organisations will be criminally liable if an associate commits fraud to benefit the organisation and reasonable fraud prevention procedures are not in place. This update encourages companies to implement robust fraud prevention measures and holds them accountable for fraudulent activities, promoting a culture of integrity and transparency.
Implications for Businesses
These updates are part of a broader effort to enhance corporate governance and combat economic crime in the UK. Businesses should take proactive steps to ensure compliance with the new requirements:
- Verify Identities: Ensure that all new and existing directors and PSCs complete the identity verification process within the stipulated timelines.
- Protect Personal Information: Utilise the option to suppress personal details from historical documents to safeguard privacy.
- Implement Fraud Prevention Measures: Develop and maintain robust fraud prevention procedures to mitigate the risk of fraud and comply with the new corporate offence provisions.
Conclusion
The 2025 updates to the Economic Crime and Corporate Transparency Act 2023 represent a significant shift towards greater corporate transparency and accountability. By staying informed and taking proactive measures, businesses can navigate these changes effectively and contribute to a more transparent and secure corporate environment in the UK.
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