This note examines how UK companies and individuals responded when identity verification became a legal requirement for company directors and beneficial owners in November 2025, marking a shift from a beneficial ownership register built on unverified self-disclosure to one requiring proof of identity.
We find that the mandate substantially increased compliance. Once the requirement became binding, verification rates rose by 46.2 percentage points among beneficial owners who are also directors and by 12.8-53.0 percentage points among directors. This compliance response was accompanied by a significant avoidance response: companies were 5.4-12.6 percentage points more likely to use an administrative loophole, allowing them to defer identity verification by up to a year. This avoidance behavior is unevenly distributed across companies with different characteristics.
We further examine delegated verification through Authorised Corporate Service Providers (ACSPs), the professional intermediaries who can verify identities on behalf of others. Looking at their risk profiles, we find that higher-risk providers perform a disproportionate share of verifications of beneficial owners based abroad, particularly when compared to those based in the UK. ACSPs in the highest decile of the risk-score account for 40.7% of all delegated verifications of foreign-based beneficial owners.
These findings indicate that identity verification meaningfully improves the reliability of information on the UK’s beneficial ownership register, but that its effectiveness is constrained by avoidance behavior and by heterogeneity in the quality of delegated verification. Therefore, we recommend that Companies House treat strategic early filing before the verification mandate as a risk signal for targeted enforcement, supervise ACSPs as delegated gatekeepers to prevent uneven verification standards across providers, and complement identity verification with risk-based monitoring of suspicious ownership patterns that identity verification alone cannot detect.