A study by Vistra has disclosed that a mere 28% of UK directors are prepared for the Economic Crime and Corporate Transparency Act (ECCTA), with the smallest companies being the least prepared and none confirming readiness.
The ECCTA mandates identity verification for all directors, persons of significant control (PSCs) and company filers by autumn 2025, yet less than 3% have complied so far.
The ECCTA represents the most substantial reform to the UK's Companies House since 1844, introducing stringent requirements for identity verification and a new offence for failing to prevent fraud.
Despite the impending changes and the risk of unlimited fines, Vistra's survey of 100 UK company directors reveals that 39% are unaware of the ECCTA deadlines. The act's enforcement could lead to disqualification of company officers and prohibit companies from filing documents or engaging in acquisitions.
Larger practices demonstrated a greater degree of preparedness, with 37% indicating they are very prepared and 49% expressing confidence in their processes to meet the ‘reasonable procedures' requirement of the new offence. However, the sentiment among companies is that the ECCTA is burdensome, with 58% holding this view and only 23% disagreeing.
Vistra global director of entity management solutions Meg Ogunsola warns that many businesses are underestimating the ECCTA's scale and urgency.
Ogunsola advises that acting early is crucial to avoid bottlenecks and severe financial penalties. She notes that Companies House will adopt a strict stance against non-compliant businesses and highlights the need for alternative solutions for overseas directors and those reliant on paper documents.
“Given the scale of the reforms and the administrative burden, it is no surprise that we are seeing many organisations seek specialist support to ensure they meet their obligations efficiently and effectively,” Ogunsola said.
“UK companies lag in ECCTA compliance readiness” was originally created and published by International Accounting Bulletin, a GlobalData owned brand.
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