Where Companies House has previously relied on a trust-based model for company filings, changes to the law have given the registrar robust powers to reject suspicious data.
This change is being embodied by the recent introduction of mandatory identity verification (IDV) requirements, which we have spoken about before.
Why was the old system failing?
Companies House has historically relied on a passive ‘good faith’ system for company filings, rendering it powerless to verify information submitted.
The inability to verify the identities of company directors and Persons with Significant Personal Control (PSCs) has enabled kleptocrats and criminals to run fraudulent operations without a traceable name.
This has changed with the coming into force of the Economic Crime and Corporate Transparency Act 2023 (ECCTA), structurally transforming the registrar into an active gatekeeper.
An increase in investigative powers means information can be increasingly verified, scrutinised and challenged.
What is IDV?
Since November 2025, all directors and Persons with Significant Personal Control (PSCs) must comply with Companies House’s new IDV requirements.
Once verified, individuals are given a unique identifier code – also known as an IDV or verification code, which must be submitted to Companies House with Confirmation Statements and other necessary filings.
IDV requirements are built to ensure those who are writing their names on forms and registering for a company link their physical identity to their corporate roles.
When enforcing these legal requirements, the tools in the arsenal of Companies House include disqualifications, fines of up to £2,000 and even criminal prosecution.
Of course, punishments are not uniform and depend on factors such as severity of the non-compliance and whether the entity/individual is a repeat offender.
How is IDV being felt by businesses?
While most businesses registered on Companies House are honest, IDV effectively tackles those bad actors who exploit anonymity to commit financial crime.
The change has resulted in nearly one million non-compliance letters from November 2025 to May 2026 regarding failures to meet identity verification standards, as per Spotlight on Corruption statistics.
Out of five and a half million companies on the register (March 2026), 183,000 PSCs had defaulted on the identification requirements (Spotlight on Corruption).
Are there any flaws in the IDV process and can they be fixed?
A potential problem for those undertaking an IDV check is that identity documents do not necessarily match what is on the Companies House system.
For example, if someone has shortened their legal name, like to Dave from David, at Companies House, their filings will be rejected because their names are not the same as shown on their identity documents.
If the information recorded on the system has been wrong since incorporation, a correction can be made using a paper application sent to Companies House.
Or if the error arose after the director was appointed, it might be possible to fix it electronically.
Waiting for corrections to be made can result in companies not filing their Confirmation Statement on time. In this scenario, Companies House has the power to begin strike-off action, wherein a company is removed from the register, but it is possible to make representations to Companies House to request further time to submit the filings needed to correct any such errors.
Lack of identity documents
Not having relevant identity documents, such as a passport or driver’s licence, can cause problems for people trying to verify their identity.
However, this can be solved by starting the process online and then completing IDV at a Post Office.
If you do not have access to a Post Office, an Authorised Corporate Service Provider (ACSP) may be able to help with completion.
How should you prepare?
Directors and PSCs should begin to check information across all appointments for accuracy.
We recommend starting by ensuring identification documents are valid and that the information at Companies House is correct and up to date.
Where there are errors, measures should be taken to implement corrections.
While most people will go through the IDV process without a problem, some might run into the hurdles described in this article.
If you need support, advice, or just want to see where your business stands with this change, please contact our Company Secretarial team for expert guidance.
