The Economic Crime and Corporate Transparency Act (ECCTA) marks a monumental shift in how UK businesses operate and tackle financial crime. But what does it mean for your organisation?
In this SmartSessions episode, your host, Oliver Telfor, Brand and Communications Manager, sits down with Nicola Gifford, General Counsel and Company Secretary, and Josh Fletcher, Product Owner.
They'll talk through:
Why the ECCTA was introduced and its core objectives in fighting economic crime.
The key changes it brings, particularly around identity verification for directors and PSCs, and enhanced powers for Companies House.
The phased rollout of its provisions and what you need to prepare for now and in the coming months.
How non-compliance could lead to severe penalties, and most importantly, how SmartSearch can help you navigate these new requirements seamlessly.
Don't miss this crucial discussion on how to secure your business and ensure full compliance in the face of the UK's most significant corporate transparency reforms in decades.
Oliver: So welcome to another episode of SmartSessions. This is a podcast by SmartSearch, which covers all things AML regulations and everything that lives in our world. Today we’re going to be talking about quite a complex conversation around the Economic Crime and Corporate Transparency Act — or ECCTA as we’ll call it, for obvious reasons. To help me unpack the complexities of the Act, I’m joined by two experts from SmartSearch, Nicola and Josh. Introduce yourselves and then we can get into the episode.
Nicola: Hi, I’m Nicola Gifford. I’m the General Counsel and Company Secretary here at SmartSearch.
Josh: Hi, I’m Josh Fletcher. I’m a Product Owner here at SmartSearch.
Oliver: So, Nicola, before we go into the specifics of ECCTA, can we just have a brief overview of why the legislation is so important and how SmartSearch is positioned to navigate these changes?
Nicola: Of course. Yes. ECCTA is a really significant shift in the UK’s approach to corporate crime and transparency. It is the biggest reform since the Economic Crime Act in 2022, which introduced sanctions against Russia following the invasion of Ukraine. Most significantly, this new legislation transforms Companies House from a passive repository of information into a regulatory body.
The issue has been that Companies House has not verified any of the information submitted to it. It currently holds records on 5.3 million corporate entities and over 7 million individuals, which creates opportunities to hide criminal activity. ECCTA gives Companies House the powers to prevent company formations and weed out criminal actors.
We’ve already seen changes, like the introduction of the overseas entities register, and now the requirement for verified email addresses — no PO boxes allowed, no fictional directors like “Mickey Mouse”. Companies House can now reject inaccurate applications much more efficiently.
This is going to have a profound effect on many businesses, especially agents who will face new responsibilities. SmartSearch, with our digital suite of electronic verification services, is expertly placed to help companies meet these new requirements.
The Act also introduces a process to authorise corporate service providers, who will need to be verified by Companies House before they can file information. This is a big step forward in reducing bad actors. The legislation also includes a new criminal offence — failure to prevent fraud — which mirrors previous offences like failure to prevent bribery. This adds legal pressure on businesses to ensure compliance. That offence takes effect from 1st September.
Oliver: OK, so lots of changes coming in across many sectors, affecting pretty much everyone. Can we have a breakdown of the key areas and who exactly will be affected by this?
Josh: Certainly. ECCTA introduces several major changes. First, company directors will be required to undergo identity verification, along with ongoing monitoring. This is a major change to the previous setup. Persons with significant control (PSCs) will also need to go through identity verification.
Limited liability partnerships are included too — their partners will be required to verify their identity. Also, anyone submitting information to Companies House must now verify their identity. This raises the bar significantly for data integrity at Companies House.
This will inevitably increase administrative workloads for many organisations. That’s where digital solutions like SmartSearch become invaluable. We help businesses comply without the overhead and complexity of manual checks.
Oliver: One of the key elements seems to be around these authorised corporate service providers. So what exactly are they, for the audience — and mainly for me — to understand? What significance does this new legislation have on them? And how does SmartSearch support them?
Nicola: An authorised corporate service provider, or ACSP, is a newly defined type of agent who is authorised by Companies House to submit company filings. Employees of companies can still do filings, but they will also have to complete identity verification.
To become an ACSP, you must already be governed by anti-money laundering regulations and be registered with a supervisory body — such as HMRC, the SRA, or the FCA. These are trusted, regulated bodies and the idea is that ACSPs will act as a filter to ensure that filings are legitimate.
ACSPs must verify the information they submit on behalf of their clients. Many of our clients will want to register as ACSPs in order to continue offering services to their clients. SmartSearch is perfectly positioned to support them with digital identity verification solutions specifically designed for this purpose.
Oliver: This has clearly been rolled out in phases due to its complexity and how many people it affects. What are some of the key dates — some of which may have already passed — and what are the most important upcoming deadlines? What must businesses do to meet them? And how does SmartSearch help guide clients through all this?
Nicola: There is a very detailed implementation timetable. As I mentioned, there are already 5.3 million entities and 7 million individuals in the system — and that doesn’t include new additions — so a phased rollout is essential.
The Act came into force in October 2023. In March 2024, entities had to provide a registered email address and confirm their business operates for lawful purposes. They also had to update their registered address details.
In May 2024, Companies House increased its fees to support the reforms. Last October, they gained powers to issue financial penalties — prior to that, fines were minimal. From January 2025, individuals will be able to suppress their residential address in the public register, which was previously only allowed in cases of serious risk.
Also in March 2025, voluntary identity verification started for individuals. Companies House is already beginning to shut down companies more efficiently, and the rate of new incorporations is slowing — a sign that the reforms are having an impact.
Applications for ACSP status have already started. Looking ahead, Autumn 2025 is a crucial milestone. From that point, identity verification will become mandatory for all new directors and PSCs. A 12-month transition period will then begin for existing companies — they must verify their directors’ identities before they can file their confirmation statements.
In Spring 2026, we expect more reforms, such as mandatory identity verification for document presenters, mandatory ACSP registration (currently voluntary), more detailed information requirements for limited partnerships, and software-only filing of accounts.
All of this is designed to stop criminals using fraudulent information and improve trust in the public register.
Oliver: I remember, Nicola, you and I spoke a couple of weeks ago about how this Act gives regulators some real teeth now — no longer just minor fines. Can you explain the implications?
Nicola: Absolutely. The powers granted to Companies House now mean real enforcement. Before this, it was a passive registrar — now it’s an active regulator. If you don’t complete the verification steps, you simply won’t be able to form a company.
Beyond that, there will be financial penalties, civil sanctions, and in serious cases, the criminal offence of failing to prevent fraud. Companies will have a defence if they can show they took reasonable steps — such as carrying out ID verification. Using a digital solution like SmartSearch will help businesses prove that they’ve taken the necessary precautions.
Oliver: So given the timeline and the breadth of these changes, what do businesses need to be doing now and going forward to ensure compliance?
Josh: Time really is critical. We’re already well into the implementation phase. Businesses should be reviewing and updating their internal processes immediately. They need to ensure they have robust procedures in place to manage verification and compliance.
Solutions like SmartSearch are ideal for this, as we provide a full digital framework that allows companies to focus on their core business, while we help manage compliance. The sooner companies begin this process, the smoother the transition will be.
Oliver: One of the things SmartSearch does is empower our customers to win business through trusted identities — which is really what all this is about. So how can SmartSearch help businesses get verified and support them in complying with this new legislation?
Josh: For businesses aspiring to become an ACSP, the first step is registering with their supervisory body. Once they’re registered, they’ll need a robust system to manage identity verification.
That’s where our tools come in. Our SmartDoc document verification process helps collect and validate ID documents. We also offer facial recognition checks — making sure the person is real and matches the ID. This ensures the process is accurate, efficient, and compliant. It also helps reduce dropout rates in onboarding, keeping the customer journey smooth.
Digital solutions like SmartSearch will be essential for businesses navigating these new requirements.
Oliver: That’s a great overview. On the flip side though — what happens to companies that don’t comply? What are the risks if they don’t have something like SmartSearch in place?
Nicola: The penalties are significant. Companies House is no longer a tick-box registrar. You won’t be able to set up a new company unless all verification steps are completed.
On top of that, there are financial penalties, civil sanctions, and the possibility of criminal charges under the failure to prevent fraud offence. However, if a business can demonstrate that it took reasonable steps — like carrying out proper ID checks using SmartSearch — then it will have a solid legal defence.
Oliver: Yes, and using something like SmartSearch to protect yourself from the outset is core to helping businesses navigate this Act. So thank you both for your time today. We’ve provided a clear, concise overview of ECCTA and its implications.
If you’d like to know more about how SmartSearch can help, head to smartsearch.com where you’ll find details on all of our products, the industries we work with, and how your business could be affected by ECCTA — and how we can help.
Thanks for joining us on SmartSessions. See you next time.