ID Verification: CH guidance on non-compliance
Long-awaited guidance on the new identity verifications has been issued by Companies House, with a particular focus on non-compliance. It came out a few days after the 18 November commencement date of the mandatory rules coming into effect.
In force
Directors (and their equivalent) and persons with significant control (PSCs) are now expected to verify their ID with Companies House. On 18 November, a 12-month transitional period of implementation came into effect and so the clock is ticking.
Directors could be committing an offence under s167M Companies Act if they continue to act without identity verification. Their company may also be in breach for failing to rectify this.
CH is encouraging early compliance. Directors can verify their identity directly with CH; using an authorised corporate service provider (ACSP); via the gov.uk app or website; or at a post office if a prebooked face-to-face verification appointment has been arranged via gov.uk.
Guidance
The new guidance sets out the CH’s approach towards individuals who fail to comply with the rules. It says it will follow guiding principles, aiming to ensure transparency, consistency, proportionality, targeting and accountability. It will consider representations if there are extenuating circumstances an individual would like CH to consider.
Its approach includes four broad categories.
- Informing people of their obligations
Communicating with individuals in different ways as to how they can comply. Companies will also be emailed ahead of filing their annual confirmation reminding them of the requirement to provide ID verification for each director.
- Nudging and guiding
CH will “nudge and guide” users to comply where it’s appropriate, timely, practicable and reasonable to do so – signposting and supporting them in various ways.
Depending on the circumstances, it may pause pursuit of non-compliance for a temporary period following a representation.
- Dealing with non-compliance
If there is still non-compliance by the due date, CH will send a default letter setting out the offence, and warning it may pursue enforcement action without further notice. Enforcement action can be taken through the courts, a referral to the Insolvency Service or by financial penalties.
- Addressing fraud and criminal activity
CH will wield its most significant powers where there is evidence of aggravated, fraudulent or criminal offences.
What should I do?
If you’ve not yet verified your ID as required, take the necessary action as soon as you can and don’t ignore contact from CH. As always, take specialist advice if you believe that’s appropriate.
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