Companies House is undergoing its most significant transformation in decades. As part of the government’s wider strategy to strengthen corporate transparency and tackle economic crime, new rules are being introduced that will fundamentally change how UK companies operate and report information. One of the most important changes is the introduction of mandatory identity verification for company directors and Persons with Significant Control (PSCs).
If you need support navigating these changes, Lexicon Tax can assist you with compliance, verification and Companies House record reviews.
Why Companies House Is Introducing Identity Verification
The UK government has been tightening corporate governance rules to reduce fraud, improve transparency and prevent the misuse of UK companies for criminal activity. Historically, Companies House has operated as a passive registry, accepting information submitted by companies with limited scrutiny.
Under the new reforms, Companies House is becoming a more active gatekeeper, with enhanced powers to:
• Check and challenge suspicious filings
• Reject information that appears inaccurate
• Remove data that is misleading or fraudulent
• Share intelligence with law enforcement agencies
• Verify the identity of individuals connected to companies
Mandatory identity verification is central to this shift. It ensures that directors and PSCs are real, identifiable individuals, properly linked to the companies they control.
Who Must Complete Identity Verification?
The new rules apply to several categories of individuals and entities involved in running or owning UK companies. Those who must complete verification include:
- Company Directors
Every director of a UK registered company must verify their identity before they can act in their role or file information. - Persons with Significant Control (PSCs)
Anyone who meets the PSC criteria — typically those who own more than 25% of shares or voting rights — must also verify their identity. - Members of LLPs
Designated members of Limited Liability Partnerships will be subject to similar verification requirements. - Individuals Filing on Behalf of a Company
Anyone submitting information to Companies House may need to verify their identity unless they are doing so through an authorised service provider. - Corporate Directors (Where Permitted)
Where corporate directors are still allowed, their own directors may need to complete verification.
These changes affect new appointments and existing directors/PSCs, meaning all companies will eventually need to comply.
How Identity Verification Works
Companies House will offer two main routes for completing verification:
- Direct Verification with Companies House
Individuals will be able to verify their identity using Companies House’s official digital verification system. This will likely involve:
• Uploading identity documents
• Completing biometric checks
• Matching identity information to government records
The process is designed to be secure, quick and accessible. - Verification Through an Authorised Corporate Service Provider (ACSP)
Businesses can also complete verification through an ACSP, such as:
• Accountants
• Tax advisers
• Company formation agents
• Corporate service providers
ACSPs must be registered and supervised for anti money laundering purposes. They can verify identities on behalf of clients and submit filings once verification is complete.
For many small businesses, using an ACSP may be simpler, especially if they already rely on an accountant for company filings.
The Transition Period: What It Means for Businesses
The transition period for identity verification is now underway. This means:
• Companies House is gradually rolling out new systems
• Some individuals may already be required to verify their identity
• Full enforcement will begin once the digital infrastructure is fully operational
During this period, directors and PSCs should prepare for verification to become mandatory. Once the rules are fully implemented:
• Unverified individuals cannot act as directors
• Unverified PSCs cannot be recorded as controlling the company
• Companies may be unable to file documents until verification is complete
• Appointments may be rejected if identity checks fail
Businesses that delay preparation may face administrative disruption, rejected filings or compliance issues.
Why Identity Verification Matters for Small Businesses
For many smaller companies, the practical impact may be straightforward — ensuring that director details are correct and completing identity checks before filing deadlines. However, the consequences of failing to comply can be significant.
Potential Risks of Not Preparing Early
• Rejected filings (e.g., confirmation statements, director appointments)
• Delays in company administration
• Inability to update statutory records
• Compliance breaches
• Potential penalties or enforcement action
Small businesses often rely on timely filings to maintain good standing. Identity verification will become a critical part of this process.
What Directors Should Do Now
To avoid last minute issues, directors and PSCs should begin preparing now. Recommended steps include:
- Review Companies House Records
Check that:
• Director names match official identity documents
• PSC information is accurate
• Dates of birth and service addresses are correct
• No outdated or incorrect filings exist - Identify Who Needs Verification
Make a list of:
• All directors
• All PSCs
• Anyone who files documents on behalf of the company - Decide Whether to Verify Directly or Through an ACSP
Many businesses will prefer using their accountant or corporate service provider. - Prepare Identity Documents
Ensure that passports, driving licences or other ID documents are valid and accessible. - Update Internal Processes
Companies may need to adjust onboarding procedures for new directors or PSCs.
Taking these steps early will help ensure a smooth transition once verification becomes fully mandatory.
How Lexicon Tax Can Help
At Lexicon Tax, we support businesses through regulatory changes and compliance challenges. With Companies House undergoing major change, our team can help you:
• Review your Companies House records
• Identify directors and PSCs who need verification
• Complete identity checks through our ACSP partners
• Ensure your filings remain compliant during the transition period
• Update statutory records and correct inaccuracies
• Prepare for future Companies House changes
• Avoid delays, rejected filings and administrative disruption
Our goal is to make compliance simple, efficient and stress free — especially for small businesses that may not have dedicated internal resources.
Call to Action
If you want professional assistance, contact Lexicon Tax today. We’ll help you understand your obligations, complete verification smoothly, and ensure your company remains fully compliant as the new rules come into force.
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