The Economic Crime and Corporate Transparency Act 2023 forms part of a legislative package which aims to prevent the abuse of UK corporate structures and tackle economic crime. It is now being implemented, step by step. Whilst the changes made by the Act are not specifically targeted at UK pension schemes, many of the provisions affect corporate trustee boards and their directors. The changes are being introduced gradually, but a key change is director identity requirements, which will become compulsory from 18 November 2025.

Background

The Economic Crime and Corporate Transparency Act 2023 (the ‘Act’) received Royal Assent on 26 October 2023, with parts of it already in force. The Registrar of Companies will have more oversight of company filings and more ability to tackle non-compliance. The Act also generally strengthens the Registrar’s approach to tackling economic crime.

How pension schemes and trustees are affected

The changes made by the Act apply to all UK registered companies, including corporate trustees. Pension scheme trustees must comply in the same way as other types of UK companies.

General changes

Existing corporate trustees can expect greater scrutiny and engagement from Companies House when making changes and completing filings.

Effective from 4 March 2024, the changes included:

• Greater powers to query information and request supporting evidence;
• All companies required to have an ‘appropriate address’ as their registered office. This is an address where documents will come to the attention of a person acting on the company’s behalf (i.e. not a PO Box);
• All companies required to have an appropriate registered e-mail address that can be used to communicate with the company.

Identity verification

From 18 November 2025 the requirement for company directors and people with significant control (PSCs) to verify their identify with Companies House will come into force, starting the 12-month transition period to comply as a part of filing the next confirmation statement. Companies House has issued guidance on compliance. Once an individual’s identity has been verified, they will not generally be required to verify it again.

Since 8 April 2025, directors and PSCs have been able to voluntarily verify their identity with Companies House. Those who have done so report that it is fairly straightforward.

Ban on corporate directors

Going forward, a company will only be permitted to retain or appoint a corporate director if all of the corporate director’s own directors are natural persons whose identities are verified. Long chains of corporate directors will end, and it is expected that overseas companies will be prohibited from acting as corporate directors in the UK.

The implementation date has not been confirmed, but late 2026 is the likely timeline.

Failure to prevent fraud offence

The Act introduced a new offence from 1 September 2025, whereby relevant organisations can be liable for fraud committed by employees, subsidiaries or other service providers.

The Home Office guidance states that this offence will only apply to ‘large organisations’, which meet at least two of the following criteria:

• Turnover of more than £36m;
• Balance sheet total of more than £18m;
• More than 250 employees;

Whilst corporate trustees of pension schemes are unlikely to fall within this definition, they may, be caught as a ‘subsidiary’ of a large organisation.  How this works for corporate trustees is unclear.

Implications for pension schemes and trustees, and actions to be taken

Companies House will have the power to fine those who do not comply, and potentially prevent them from filing information at Companies House. Fines can range from £250 to £2,000, depending on the seriousness of the offence. Some will be applied daily for non-compliance, which means that fines can escalate quite quickly to material sums.  Generally, before fines kick in, there will be warning notices and grace periods to permit compliance.