The Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) marks a significant shift in the UK’s approach to tackling financial crime. Gradually implemented since 2024, ECCTA aims to strengthen transparency, disrupt economic crime, and modernise the UK’s corporate framework [1].
Key Objectives of ECCTA 2023
- Improve transparency of UK companies and legal entities
- Empower Companies House with new enforcement and intelligence-sharing capabilities
- Combat money laundering, fraud, and misuse of corporate structures
- Introduce identity verification for directors and PSCs (People with Significant Control)
Defence Against Money Laundering (DAML) Exemption Provisions
Under ECCTA 2023, certain transactions may be exempt from money laundering offences if all of the following conditions are met:
- The transaction occurs within the regulated sector
- It involves money or property under £1,000
- It relates to client-owned or owed assets
- It is made to exit the client relationship
- Client Due Diligence (CDD) has been completed
Even if these conditions are met, firms must still refer the matter to their nominated officer if a Suspicious Activity Report (SAR) may be required [2].
Companies House Reforms: Identity Verification (April 2025)
From April 2025, Companies House began rolling out mandatory identity verification for:
- Directors
- People with Significant Control (PSCs)
- Authorised Corporate Service Providers (ACSPs) [3]
Verification Methods
- GOV.UK One Login (online ID verification)
- Via an ACSP (e.g., solicitor or accountant registered with an AML supervisory body)
Failure to verify identity on time will be a criminal offence, resulting in:
- Financial penalties
- Inability to file company documents
- Restrictions on forming new companies [3]
Registering as an Authorised Corporate Service Provider (ACSP)
Third-party providers (e.g., law firms, accountants) who wish to verify identities for Companies House must register as ACSPs.
Requirements to Register
- Be supervised by a UK AML supervisory body
- Hold a senior role in the business (e.g., director)
- Complete Form FA10b and submit to the SRA
- Maintain records of identity checks for 7 years
Once registered, ACSPs can:
- Verify identities on behalf of clients
- File documents with Companies House from Spring 2026 [4]
Upcoming Changes: Software-Only Filing (April 2026 Onwards)
From 1 April 2026, the online service to file company accounts and tax returns will close. Companies must transition to commercial software for:
- Filing Company Tax Returns with HMRC
- Filing annual accounts with Companies House [5]
What You Need to Do
- Choose suitable software now using the Find Software Tool
- Save previous filings before 31 March 2026
- Prepare for full transition to digital-only filing by April 2027
Final Thoughts for Small Firms
The ECCTA 2023 and Companies House reforms represent a major shift in compliance expectations. Small law firms must:
- Stay up to date with AML/CFT obligations
- Implement robust identity verification processes
- Prepare for digital-only filing requirements
- Register as ACSPs if offering verification services
These changes are designed to protect the integrity of the UK’s financial system and ensure that law firms play a proactive role in preventing economic crime.
References
[1] Economic Crime and Corporate Transparency Act: outline … – GOV.UK
[2] SRA | Your AML obligations | Solicitors Regulation Authority
[3] Verifying your identity for Companies House – GOV.UK
[4] Being an Authorised Corporate Service Provider (ACSP) – GOV.UK
[5] Closure of the service to file your company accounts and tax return