Understanding the ECCT Act (2023)
- The Just Audit team
- Apr 8
- 2 min read
The Economic Crime and Corporate Transparency Act (ECCTA) was introduced to significantly improve governance and compliance standards across UK companies.
According to the government’s website, it is intended to “improve transparency over UK companies and other legal entities to strengthen our business environment, support our national security and disrupt economic crime, while delivering a more reliable companies register to underpin business activity”.
The objective is that all information delivered and held by Companies House should be more reliable and accurate whilst also reducing business fraud.
The additional responsibilities for ECCTA compliance fall to:
All new and existing company directors
People with significant control of a company (PSCs)
Anyone who files information on behalf of a company
Since March 2024 Companies House has also been granted powers that allow them to: revisit the information it holds, looking for accuracy; and to scrutinise any new information filed with them. They are prioritising incorrect or fraudulent data. Their increased powers allow them to share findings with law enforcement agencies and other government departments.
Implementing ECCTA is a complex process which is expected to take until 2027 for a complete roll-out. Some key areas that companies can address in the meantime include:
Providing a registered address as all PO Box addresses are no longer acceptable
Registering an appropriate and monitored email address for official correspondence – together with a commitment to timely communications
Confirming that the company’s activities are lawful when submitting annual confirmation statements
Other ECCTA changes include identity verification for directors, shareholders, and company secretaries, and restrictions on corporate directors in most cases. Companies need to create a process for verification by gathering documentation and reviewing board structures to remain compliant.
As identity verification is a major part of the reforms, the government is allowing specific professionals registered for AML (Anti Money Laundering) to become ACSPs (Authorised Corporate Service Providers). These may be Trust and Company Service Providers, accountants and solicitors.
For most companies these additional considerations are purely administrative. However, planning to embrace ECCTA within your own internal processes will mean you are able to demonstrate compliance and transparency as a natural part of your culture.
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