Identity verification is the legal process of confirming that a person or organisation is who they say they are. It helps prevent fraud, tax evasion, money laundering, terrorist financing, and abuse of financial systems. Businesses must prove that clients are legitimate before providing services — especially when risk is higher.

When Identity Checks Are Required

• When onboarding new clients
• If risk levels change or suspicious activity appears
• Before offering regulated professional services
• When payment behaviour or ownership suddenly changes

These checks are not optional. Failure to verify identity can lead to penalties, account freezes, investigations, reputational damage, and criminal consequences.

Acceptable Proof of ID & Address

Proof isn't just a name written in an email — it must be documented. Typical verification includes:

• Passport or driving licence
• Recent utility bill or council tax statement
• Bank statements showing address

In some cases, enhanced checks (E-KYC) are required — such as source of funds, ownership structure, or AML screening.

Risk-Based Assessment Matters

Not all clients have the same level of risk. Businesses should apply stronger verification when:

• Clients operate internationally
• Payments vary unexpectedly
• Large or unusual transactions occur
• Clients come from high-risk industries

Good record-keeping protects you. Compliance is not just a legal obligation — it's a financial safeguard.

Record Keeping Requirements

Keep ID documents securely for a minimum of five years. Store clean digital audit trails in accounting systems, encrypted drives, or secure cloud platforms. Never hold data informally in WhatsApp chats or desktop folders.

Consequences of Getting It Wrong

If identity verification fails or is ignored, businesses risk:

• HMRC penalties
• Financial loss from unpaid invoices
• Regulatory investigation
• Permanent reputation damage

Preventing risk is cheaper than fixing mistakes later.

Episode Timecodes

• 00:00:00— Why identity verification matters
• 00:01:32— When checks are legally required
• 00:03:18— What documents are acceptable
• 00:05:02— Red flags & high-risk scenarios
• 00:06:44— Compliance tips for business
• 00:09:11— Final thoughts

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Be yourself. Everyone else is already taken. So said Oscar Wild. In this week's I Hate Numbers episode, episode number 300, I'm going to be talking about identity verification and what every company must do from November, 2025, and by company by the way, it doesn't matter whether that company is a private company with shareholders or a not-for-profit company with no shareholders, limited by guarantee or a charity company.

If you are a company and you are connect to that company by way of what's called a PSC or director, then it applies to you. I'm going to be talking about why identity verification matters, the key dates, and who must actually verify. We’ll look at how that process is actually done and there are two options

I'm going to be talking through, the consequences and there will be consequences of not actually verifying and why it actually masses. Let's crack on.

Now firstly, from the 18th of November, 2025, every UK company director and every person with significant control, a PSC for want of a better shorthand must prove who they are. Now, this is not a self-identity crisis. You've got to verify yourself. You've got to prove who you are, and you've got to make sure HMRC are aware of that, and there's going to be some form filling to do. If you don't verify, you can't file.

Let's break this down. What does it mean actually for your business? And firstly, we're going to look into why identity verification matters. Now Companies House are saying that they're cleaning up the register, that's the Companies House register where all companies are listed in the United Kingdom.

They're trying to eliminate fraud, shell companies and hidden ownership damage trusts. Now there is legal backing for this. Under the Economic Crime and Corporate Transparency Act 2023, Companies House wants a register that shows the real people running UK companies. Now, irrespective of your viewpoint, whether you think this is going to work, the fact is it's law and you've got to comply.

Now, 6 to 7 million people approximately will need to verify between November, 2025 and November, 2026, and it covers the following: existing directors, new directors, existing PSCs and new PSCs. And remember, if you are a not-for-profit company, limited by guarantee or a charity, then it equates to the listed directors at Companies House, sometimes referred to as trustees.

Now, this process should be, I emphasise that it should be, a one-off process. Let's now explore and look at the key days and who must actually verify. Now, the rollout began on the 18th, November, 2025. If you're a new director, you have to verify yourself before forming a company or being appointed as a director.

If you are an existing director already registered, then you must verify yourself by the next confirmation statement, and the deadline for all of this is November, 2026. Now, if you're a PSC, a person of significant control, each has got a strict 14-day window and it typically follows that birth date. So if the PSC's birth month is march, their window begins on the 1st of March, 2026.

Now having explained the background for it and who it applies to, how do you actually do this? And there are two verification routes available, and we give our clients both of those options. Option number one, which is free, so there's no fee to pay, it's just your own time. It's relatively quick. If it works smoothly, the two verification routes for as follows.

Option one, use the Gov UK One Login. It should be issued to you by Companies House. If you don't have that, ask your accountant. And if you haven't got an accountant, by all means contact us and we'll help you out with this. Now it's free. It's relatively fast, assuming there are no issues with address changes.

If you're comfortable with technology, it should be a relatively straightforward task. A mixture of our clients manage this successfully and a mixture of our clients just give up at the first hurdle and they find it very stressful. Now, option number two. It's to use an authorised corporate service provider, ACSP for short.

Now, it so happens that I Hate Numbers is an ACSP. We've registered, we've got the infrastructure, and we can, and have done verifying identities for individuals resolving any issues, manage the process from start to finish. It's relatively smooth for the client. And option two is a paid service, but again, it just takes the aggravation hassle.

But those are the two options you have Now, what are the consequences if you don't actually verify? Now, not verifying can lead to being unable to act as a director, confirmation statements that get rejected, and if confirmation statements, by the way, are not updated, that tends to be a trigger towards action of Companies House removing from the register

if they're not updated in time. It flags a compliance issue and potentially, enforcement action. Now, Companies House, because it's a transition year, will contact companies directly with help and guidance. So what might seem a bit of a nightmare situation can be rectified. Now, why does this all matter?

Well, apart from it being legal, identity verification effects, company formation, director appointments, PSC registration, confirmation statements and compliance obligations. Now, I Hate Numbers can verify directors, by the way. One of the advantages of us doing this is you don't have to do the digital ID yourself.

We can verify directors and PSCs, manage the filings and support wider financial needs, including company secretarial services, cloud accounting, tax planning, and all that jazz. Now, this is a major change, but if you have the right support and guidance, if you're comfortable with technology and all the rest of it, it should be a relatively straightforward thing.

Again, amongst our own client base, we've got a mix. Some people prefer to delegate that responsibility and we take care of it for them. Or they prefer to battle the tech. Some people have managed it quite quickly. Some people struggle. The choice is yours. Whichever route you adopt, folks, though, please make sure that you do it sooner rather than later.

Don't leave it on the back burner. Plan it, do it and profit.