New obligations for directors under the Economic Crime and Corporate Transparency Act 2023 (ECCTA) became law in October 2023, to improve the financial information on the Register. Some obligations and liabilities are already in effect, while others are scheduled to be implemented during 2025 and 2026.
All Directors and Persons with Significant Control (PSC) must be verified through a new identity verification process. There will be a timeframe in which they can do this themselves or with an Authorised Corporate Service Providers (ACSPs). This acts as a data cleanse for the Register and from 1 September 2025, the ECCTA introduces a new corporate offence for failing to prevent fraud.
Upcoming Timelines
Companies that file small companies or micro-businesses accounts, will no longer have the option of filing abridged accounts, as this option is being removed to enhance corporate transparency to see who and how a company is being controlled.
Companies will be required to document and file profit and loss accounts, which helps to improve the financial information on the Register. Smaller businesses will also have to file their directors’ reports to provide some context behind their company’s financials.
Companies House are aiming to make it compulsory for companies who are claiming an audit exemption to provide an enhanced statement from their directors on a balance sheet, clearly stating the reason of it being claimed and confirming the company is eligible for it.
From 1 April 2027 to incorporate the use of mandate software to file all accounts, including package accounts.
What does this mean for Credit Controllers?
This will create a more efficient and reliable source of information available on the Register for the Credit Controllers, enabling them to make better-informed decisions when onboarding clients as well as when dealing with clients that may be experiencing cash flow issues, conforming the company is eligible for it.
What does this mean for Insolvency Practitioners?
Aside from ACSP and identification requirements of directors and PSCs, access to more reliable sources of information should enable a more proactive approach when investigating dissenting directors, leading to better recoveries for creditors and increased disqualifications/repercussions for those directors who have failed to act in the best interest of the creditors
The recent moves have been positive by the reform, but some disruption is expected as the new verification requirements are fully implemented. By the end of 2026, Companies House should be able to make identity verification of the presenters a compulsory part of filing a document and will require third party agents filing on behalf of companies to be registered as an ASCP. They will finally have the authority to reject documents submitted by disqualified directors, who will be prohibited from filing.
Key Takeaways for Credit Professionals
- From 18 November 2025, all directors and PSCs must pass identity verification before appointment.
- Companies will no longer be able to file abridged accounts, as full profit and loss statements and directors’ reports will be mandatory.
- Audit exemption claims must be supported by a clear directors’ statement confirming eligibility.
- By 2027, all accounts must be filed using mandated software, increasing filing consistency and reliability.
- These reforms seek to provide more accurate, transparent financial data, offering credit professionals a stronger foundation for assessing risk, monitoring clients, and making informed decisions.
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