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Economic Crime Corporate Transparency Act: What UK Companies Must Do

The Economic Crime Corporate Transparency Act has reshaped how UK companies interact with Companies House and manage director identity verification. Small business founders, directors and company officers need to understand the new corporate transparency reforms and practical steps to stay compliant in tax year 2026/27.

What is the Economic Crime Corporate Transparency Act and why it matters

The Economic Crime Corporate Transparency Act (ECCTA) is a package of legal reforms aimed at reducing corporate misuse for money laundering, fraud and other economic crime. The Act tightens registration rules, gives Companies House more powers to check data, and introduces stronger duties on directors and those who control companies.

For small businesses the ECCTA means more scrutiny of who is listed at Companies House and how records are verified. The reforms are intended to protect legitimate businesses by improving the accuracy of the public register and making it harder for criminals to use shell companies.

Key changes that limited companies must know

Below are the most important reforms affecting day-to-day company administration. Where the law sets specific processes or deadlines consult the legislation or GOV.UK guidance for the definitive detail.

Identity verification for incorporations and filings

  • Directors and people who confirm company information may now be required to verify their identity when incorporating a company or filing certain documents.
  • Companies House has expanded its powers to require evidence of identity and can refuse filings or take other action where identity is not verified.
  • As a practical step, directors should keep certified ID documents and proof of address to hand and follow Companies House guidance when prompted.

Stronger checks on People with Significant Control (PSC)

  • Corporate transparency reforms place greater emphasis on the PSC register being accurate and up to date.
  • Companies must collect, confirm and report accurate information about anyone who exercises significant control over the company.
  • If your company uses nominee arrangements or complex ownership structures you should review them and ensure the PSC statements are accurate and defensible.

New and extended Companies House powers

  • The Registrar can query or require evidence for entries on the public register and can remove or annotate records where inaccuracies are found.
  • There are enhanced information-sharing powers with other authorities, which increases the likelihood of cross-checks and investigations.
  • Companies should respond promptly to any Companies House query to avoid escalation.

Criminal and civil penalties and director responsibilities

  • The ECCTA enhances the potential penalties for false or misleading filings and for facilitating economic crime through corporate structures.
  • Directors must ensure that information filed is accurate and that they can demonstrate reasonable steps were taken to verify it.
  • Poor governance or lax identity processes can increase personal and corporate risk.

Overseas ownership and property-related registers

  • Related reforms require more transparency about overseas ownership of UK land and property. If your company owns property or is connected to entities holding UK land you may face additional disclosure obligations.
  • Check GOV.UK guidance and legal texts where this applies to your business model.

Practical steps for company directors and founders

Small companies can take pragmatic actions now to reduce compliance risk and prepare for ongoing requirements.

1. Review and update your Companies House records

2. Implement robust identity verification processes

  • Introduce simple internal processes so any new director, company secretary or person filing documents is verified before submission.
  • Keep a securely stored copy of the identity evidence used – for example, passport or driving licence and a recent proof of address.
  • Where you use third-party agents or corporate service providers, check they perform adequate identity checks on your behalf.

3. Tighten PSC and ownership checks

  • Review shareholders, beneficiaries and any arrangements that could confer significant influence.
  • If needed, clarify and document why a person is or is not a PSC, and obtain their signed confirmation where possible.

4. Train anyone who handles filings and bookkeeping

  • Staff or outsourced bookkeepers who prepare filings should be aware of the accuracy requirements and how to escalate queries.
  • Consider updating bookkeeping and accounting procedures to capture verified identity details for new stakeholders. For help with bookkeeping and digital tools see our Bookkeeping & Xero service: /services#bookkeeping-xero

5. Respond rapidly to Companies House and statutory queries

  • If Companies House queries an entry, treat it as urgent. Delays can increase the risk of filing rejection or further action.
  • Keep records of your responses and of the evidence you used to support any filing.

6. Review wider corporate governance and AML practices

  • While ECCTA focuses on transparency at Companies House, many firms will benefit from simple anti-money laundering checks and stronger internal controls.
  • Consider whether your firm should have basic AML policies, even if not formally required by law, to protect reputation and limit risk.

How the changes affect common company operations

Below are specific processes where directors will notice practical impact.

Incorporation and appointed officers

  • Incorporation may take a little longer where Companies House requests identity evidence or performs checks.
  • Appointing new directors should include an ID verification step and a check that the director satisfies legal eligibility.

Filing annual confirmation statements and accounts

  • Ensure the information filed matches your internal records and any PSC information declared during the year.
  • If an accounts filing or confirmation statement triggers a Companies House check you must be able to support the entries with documented evidence.

Share transfers, allotments and changes to ownership

  • Because the PSC register is under closer scrutiny, share transfers and allotments should be documented clearly and reflected on the PSC and shareholder registers quickly.
  • Delays or informal arrangements can create queries and risks.

Third-party service providers and agents

  • If you use agents for filings, confirm they understand the new ECCTA expectations and the type of evidence needed to complete filings successfully.
  • Consider a short checklist for agents so they provide the required documentation at the point of filing.

Record keeping and evidence – what to keep and for how long

  • Keep identity evidence for directors and PSC confirmations for a reasonable period after a person leaves your company – for example at least several years.
  • Maintain minutes, share transfer documentation and resolutions that support changes on the register.
  • Secure storage and data protection are important. Balance the need to keep evidence with legal obligations under data protection legislation.

Where to find authoritative guidance and legislation

Always check those official sources when you need definitive or legally binding detail.

How Figures can help your business respond to ECCTA

  • Statutory accuracy and timely filings are now more important than ever. Our Statutory Accounts & Tax service helps ensure accounts and statutory filings are accurate and supported by the right evidence.
  • For companies wanting stronger internal controls and reporting, our Management Reporting and Fractional CFO services provide governance, forecasting and oversight to reduce compliance risk.
  • If payroll or employment records intersect with director records, our Payroll & PAYE team can help ensure data is consistent across filings.

Practical checklist for the next 30 days

  • Review your Companies House entries and PSC register for accuracy.
  • Gather identity evidence for current directors and store it securely.
  • Update your process for onboarding new directors and shareholders to include identity checks.
  • Speak to your accountant or legal adviser if you have complex ownership structures or overseas connections.
  • If you use third-party filing agents, confirm they are aware of ECCTA requirements.

What happens if you do nothing

  • Failing to comply with the ECCTA can lead to rejected filings, increased scrutiny, investigations and potential penalties.
  • Even unintentional errors could prompt Companies House queries or referrals to enforcement agencies if the register appears unreliable.
  • Proactive compliance reduces disruption, protects reputation and supports investor confidence.

UK tax and legal accuracy

This article is for informational purposes only and does not constitute professional tax or financial advice. Please speak to a qualified accountant before taking action. This article refers to legal and regulatory developments relevant to tax year 2026/27. Always confirm current obligations on GOV.UK or via legislation.gov.uk.

Frequently asked questions

What is the Economic Crime Corporate Transparency Act and who does it affect?

  • The ECCTA is a set of reforms designed to improve corporate transparency and reduce economic crime. It affects limited companies, directors, persons with significant control and some overseas entities connected to UK property.

Do I need to verify my identity every time I file with Companies House?

  • Not necessarily every filing will require additional identity verification. However incorporations and certain filings can trigger identity checks. Keep ID evidence ready and follow Companies House guidance when requested.

How do the reforms change the PSC register rules?

  • The reforms increase attention on the accuracy of the PSC register and require firms to be able to demonstrate who holds significant control. Companies should review their ownership structures and update records promptly.

What documents should I keep to comply with ECCTA checks?

  • Retain director identity documents, proof of address, minutes, share transfer records and PSC confirmations. Keep these securely for several years after the person leaves the company.

What should I do if Companies House queries my company information?

  • Respond promptly, provide the requested evidence and seek professional advice if you are unsure. Ignoring queries increases the chance of further action.

Summary and next steps

The Economic Crime Corporate Transparency Act brings practical changes that affect how UK companies register information and verify the identity of directors and controllers. Directors and founders should act now to review records, tighten onboarding processes and keep evidence to hand. These steps reduce risk and support a trustworthy public register.

If you would like help checking your Companies House records, improving onboarding for new directors or preparing accurate statutory filings, speak to Figures. We can assist with Statutory Accounts & Tax, Bookkeeping & Xero and governance services. To get started, book a discovery call.