UK Business Compliance in 2025: What Every Company Needs to Know

The UK business landscape continues to evolve rapidly, with 2025 bringing substantial regulatory changes affecting company registration, tax obligations, and digital compliance. Driven largely by the Economic Crime and Corporate Transparency Act and HMRC’s Making Tax Digital programme, these reforms aim to strengthen corporate transparency, modernize filing systems, and reduce economic crime.

If your business operates in the UK or plans to expand into the market, understanding and acting on these changes is essential. This overview covers the most significant developments in UK company law, VAT compliance, registered office requirements, and digital filings, offering practical guidance to help your company remain compliant.

New identity verification requirements for directors and PSCs

Starting from March 25, 2025, identity verification becomes a legal requirement for individuals who own, manage, or control UK companies. This includes directors, Persons with Significant Control (PSCs), and authorized agents. Verification can be completed directly via the Companies House One Login system, using documents such as a passport, or through an Authorised Corporate Service Provider (ACSP) such as 1Office.

This initiative is intended to ensure the integrity of information held by Companies House and deter fraudulent registrations. The verification process will be phased in, but it will become mandatory for all relevant parties. Failure to comply may result in financial penalties and restrictions on submitting company filings.

In a nutshell:

• Who Needs to Verify: Anyone establishing, operating, owning, or controlling a UK company must verify their identity. This includes new and existing directors, Persons with Significant Control (PSCs), and those acting on behalf of a company.
• Verification Methods: Individuals can verify directly with Companies House using GOV.UK One Login (using ID documents like a passport) or through an Authorised Corporate Service Provider (ACSP).
• Phased Introduction: Identity verification will be phased in. Voluntary verification begins March 25, 2025, eventually becoming mandatory for all relevant parties.
• Consequences of Non-Compliance: Failure to comply is an offense, resulting in financial penalties and restrictions on company filings.

Stricter rules for registered office addresses

Companies are no longer permitted to use P.O. boxes as their registered office. Under the updated regulations, a company must maintain an “appropriate address” – a physical location in the UK where official correspondence can be received and acknowledged.

Businesses using a non-compliant address may find their registered office forcibly changed to a default location by Companies House, which can lead to delays and reputational issues. For businesses operating internationally or without a UK base, services such as 1Office’s registered office solution provide compliant, physical addresses in the relevant jurisdiction.

Companies house confirmation statement: New requirements

In addition to identity verification, the annual confirmation statement now includes further requirements. From March 2024 onward, all companies must provide a registered email address for Companies House communications. This email will not be made public but is mandatory for both new and existing companies.

Furthermore, every confirmation statement must now include a declaration that the company’s intended future activities are lawful. This “statement of lawful purpose” reinforces the government’s drive to reduce misuse of UK corporate structures.

Non-compliance with these updated confirmation statement obligations may lead to penalties, administrative delays, or regulatory scrutiny.

Key updates include:

• Registered Email Address: All companies must provide a registered email address for Companies House communication. This address will not be publicly accessible. New incorporations from March 4, 2024, onwards must provide this email at incorporation.
• Statement of Lawful Purpose: Companies must annually confirm the lawfulness of their intended future activities within their confirmation statement. This requirement applies to all statements dated March 5, 2024, onwards.
• Enforcement and Sanctions: Failure to file the confirmation statement on time may result in financial penalties. Detailed enforcement guidance is available to assist companies with compliance.

Changes to VAT compliance: Making tax digital (MTD)

The UK government’s Making Tax Digital initiative is now in full effect for VAT-registered businesses. As of 2025, all VAT-registered entities must maintain digital records and submit returns using MTD-compatible software. Businesses are also subject to a new points-based penalty system for late submissions and payments. Under this system, each missed submission accrues a penalty point. After reaching a threshold (typically three points), companies face a £200 fine, with further penalties applying to ongoing non-compliance.

Looking ahead, MTD for Income Tax will become mandatory in 2026 for sole traders and landlords earning over £50,000. Those with lower income thresholds will be included from 2027. Preparing now by migrating to compliant software will save both time and costs in the long run.

Under MTD, the following information must be kept using functional compatible software approved by HMRC:

• Name and address of the VAT registered person
• Address of the VAT registered person’s principal place of business
• The VAT registration number
• The VAT accounting schemes
• The date and value of each supply made, and the type of VAT charged
• The date and value of each supply received, plus the amount of any input tax that needs to be recovered
• The VAT exclusive value of each of the following outputs: standard rated, reduced rated, zero-rated, exempt or outside the scope.

According to HMRC the MTD requirements are met by most of the online accounting packages currently available, provided they are digitally linked to HMRC like My1Office.

Strengthening oversight of ACSPs

Authorised Corporate Service Providers, such as accountants, solicitors, and formation agents, now face increased scrutiny. From February 2025, ACSPs must register with Companies House and verify their own identity and credentials. They must also be supervised by an AML-regulated body, such as HMRC or the FCA.

For clients, this means working only with registered ACSPs who can legally submit filings and conduct identity checks. If you use third-party service providers, ensure they are listed and compliant.

Key updates include:

• Definition and Role: ACSPs are individuals or organizations conducting Anti-Money Laundering (AML) supervised activities, such as company formation agents, solicitors, accountants, and chartered secretaries.
• Registration Requirements: From February 25, 2025, third-party providers must register as an ACSP with Companies House, including identity verification and business information.
• Supervisory Bodies: ACSPs must be supervised by a relevant UK AML supervisory body, such as HMRC, the Financial Conduct Authority, or the Insolvency Practitioners Association.
• Application Process: Registration involves applying via the new “Apply to register as a Companies House authorised agent” service, paying a fee, and obtaining a unique identification number.
• Responsibilities and Compliance: Registered ACSPs can file information and perform client identity verification. Companies House will provide guidance on ACSP responsibilities and regulatory compliance.

Protection of personal information

While the focus on transparency is clear, the government has also taken steps to protect individuals’ privacy. From January 27, 2025, it is possible to apply for the suppression of certain personal details from the public register, such as residential addresses, signatures, and former names, particularly for individuals at risk of harm.

This ensures that corporate transparency does not come at the cost of personal safety.

Key updates include:

• Suppression of Personal Information: From January 27, 2025, individuals can apply to suppress certain personal information from historical documents. This includes registered office addresses (if it’s their home address), residential addresses, day of birth, signatures, and business occupations.
• Protection Due to Risk of Harm: Individuals at risk of harm or violence (e.g., domestic abuse survivors) can apply for information protection, including names (or previous names), sensitive addresses, and, in severe cases, all other details like service addresses and partial dates of birth.

How 1Office helps you stay compliant

Staying up to date with UK regulatory changes is more important than ever. At 1Office, we provide end-to-end compliance solutions for businesses operating in the UK and internationally. Our services include:

• Registered office and service address provision
• Identity verification support
• VAT registration and digital accounting
• Confirmation statement and annual filings
• Company formation and restructuring

We help simplify the complex, so you can focus on running and growing your business. Contact our expert team to ensure your business remains fully compliant in 2025 and beyond.

Summary of The Economic Crime and Corporate Transparency Act changes with Companies House

The Economic Crime and Corporate Transparency Act brings sweeping changes to Companies House and UK company regulation, impacting various aspects of company operations. These changes, rolled out over the coming years, aim to enhance transparency, improve data accuracy, and strengthen the integrity of the UK business register.

Key areas of change include:

• Data Integrity: The Registrar of Companies has new statutory objectives to ensure accurate register information, prevent misleading filings, and deter unlawful activities. Registered office address requirements are stricter, and companies must declare the lawfulness of their purpose and intended activities.
• Confirmation Statement: The confirmation statement process is significantly updated, requiring a registered email address, a confirmation of lawful purpose, and facing potential penalties for non-compliance.
• Fees: Companies House fees have been revised to support its expanded powers and responsibilities.
• Authorised Corporate Service Providers (ACSPs): ACSPs, including company formation agents, solicitors, and accountants, face new registration and supervision requirements to ensure proper identity verification practices.
• Identity Verification: A new identity verification process will be phased in, requiring individuals involved with UK companies (directors, PSCs, etc.) to verify their identities, either directly with Companies House or through an ACSP.
• Personal Information Protection: Measures are introduced to protect personal information held on the Companies House register, allowing for suppression of certain details and enhanced protection for individuals at risk of harm.
• Limited Partnerships (LPs): LP regulations are updated with stricter requirements for partner information, registered office addresses, SIC codes, annual confirmation statements, and mandatory filing through ACSPs. Companies House also gains new powers regarding LPs.
• Company Ownership Transparency: Measures are introduced to improve transparency of company ownership, requiring full shareholder names, a one-off full shareholder list, more detailed information on PSC exemptions, and restrictions on corporate directors.
• Accounts Filing: Companies will transition to software-only accounts filing. Small company filing requirements are revised, including the removal of abridged accounts, and audit exemption claims require additional statements.