Economic Crime and Corporate Transparency Act 2023 Update
The Economic Crime and Corporate Transparency Act 2023 is one of the most significant updates to UK company law in many years. It aims to reduce economic crime, improve transparency, and strengthen the accuracy of information held at Companies House.
These changes affect how companies are formed, how records are kept, how individuals are verified, and how fraud is handled. Some elements have already taken effect. Others will continue to roll out through 2026.
Below is a practical overview of what the Economic Crime and Corporate Transparency Act 2023 covers and what UK businesses need to prepare for.
Companies House Reform
Reform of Companies House is central to the Act. It moved from a passive register to a more active regulator with stronger powers. As of November 2025, several significant changes have come into force.
Mandatory Identity Verification
From November 2025, all new and existing directors, People with Significant Control (PSCs), and individuals who file documents must verify their identity with Companies House.
Verification is now a legal requirement and will become standard for maintaining a compliant company record. Businesses should ensure all relevant individuals complete verification promptly.
Removal of Certain Company Registers
Companies no longer need to maintain:
- The register of directors
- The register of directors’ residential addresses
- The register of secretaries
Companies House now holds the complete and official version of these records. Filing inaccurate information can lead to unlimited fines, making clean, accurate data more critical than ever.
Stronger Powers to Challenge Information
Companies House now has greater power to:
- Reject misleading company names
- Require companies to change names
- Query filings
- Remove information that appears false or suspicious
These powers are intended to prevent fraudulent companies from being used for criminal purposes.
Lawful Purpose Confirmation
New companies must confirm that they are being formed for a lawful purpose. They must repeat this statement each year as part of their annual filing. This requirement aims to discourage abusive company formations and improve accountability.
Failure to Prevent Fraud Offence
The Act introduced a new offence, failure to prevent fraud, which took effect on 1 September 2025.
Large organisations are liable if an employee or associated person commits fraud that benefits the organisation, and no reasonable prevention measures were in place.
It applies to organisations meeting at least two of the following criteria:
- More than 250 employees
- More than £36 million turnover
- More than £18 million in assets
Although this focuses on larger businesses, smaller companies may still be affected through new due diligence checks imposed by clients or suppliers who must meet higher fraud-prevention standards.
Expanded Corporate Liability
The Act expands the identification doctrine. Liability can now be attributed to senior managers, not just board-level directors. This means a broader group of individuals can trigger corporate accountability when criminal behaviour occurs.
This change makes it easier to prosecute larger companies when wrongdoing involves senior decision-makers.
Cryptoasset Powers
The Act includes new powers allowing law enforcement to seize and recover cryptoassets suspected of being linked to criminal activity.
These measures support investigations into money laundering, fraud, and other offences that use digital currencies. While this primarily falls to law enforcement, it reflects a broader focus on accurate financial trails and transparent reporting.
Information Sharing Between Institutions
The Act introduces measures that allow financial institutions to share information more effectively to prevent and detect economic crime.
This change addresses delays caused by limited data sharing among banks, accountants, and other regulated firms. Faster information exchange should improve the detection of suspicious activity.
Limited Partnerships Reform
Limited partnerships have been subject to misuse in the past. Reforms now require:
- Stricter registration processes
- Verification of partners
- Annual confirmation statements
These measures increase transparency and reduce opportunities for criminal exploitation.
Future Changes
Some changes have been confirmed for the future, but do not yet have fixed start dates. These include:
- Mandatory identity verification for corporate directors and corporate members
- A complete shareholder list that companies will need to file with Companies House
Businesses should expect continued updates through 2026 as these provisions roll out.
What These Changes Mean
The Act places greater emphasis on identity checks, data accuracy, and transparent reporting. Businesses should expect closer scrutiny from Companies House and should ensure that:
- All directors and PSCs are verified
- Company filings match the real structure and operations of the business
- Annual records remain up to date and accurate
- Fraud prevention processes are documented and in place
Good bookkeeping is central to substantial compliance. Clean records, accurate filings, and organised documentation make it easier to meet the new legal requirements. Rosemary Bookkeeping can help you maintain precise, reliable records so you stay compliant and avoid errors that could trigger intervention from Companies House.
Need Help Navigating the Changes?
These reforms affect record keeping, company maintenance, and verification processes. If you want support keeping your information up to date, your local Rosemary Bookkeeper can help maintain compliant records and prepare your filings.
