Accountant warns Companies House identity checks are creating a hidden compliance burden

Chris Demetriou, co-owner of Archimedia Accounts, says the practical reality of implementing the new regime is proving far more time-consuming than many expected, despite government assessments suggesting the process would take around ten minutes per individual.
 
While supporting the principle behind identity verification, Demetriou believes the operational impact on accountancy practices deserves greater recognition.
 
“Most clients complete the process without any major issues,” said Demetriou.
 
“The challenge comes with the minority who don’t. That’s where the time starts to add up.
 
“What sounds like a simple ten-minute verification can quickly become a 30 to 60-minute exercise once you’re explaining requirements, checking details, chasing verification codes, resolving discrepancies and helping clients navigate the process.
 
“We’re also seeing a lot of Companies House technical issues (error codes whilst the clients are performing their ID verification online).”
 
The changes form part of wider reforms designed to improve the accuracy and integrity of Companies House records.
 
However, Demetriou says many firms may underestimate the amount of work involved because the verification itself is only one part of the process.
 
“In practice, this has become process management rather than simple administration,” he said.
 
“The actual identity check is often the easiest part. The workload sits around it. You’re helping clients understand what’s required, managing deadlines, dealing with incorrect information already held on record and making sure everything is completed correctly.”
 
Based on his firm’s experience, Demetriou estimates that around a quarter of clients require some form of hands-on support to complete the process successfully.
 
He believes this creates a challenge for firms that are balancing compliance responsibilities with client service expectations.
 
“Many clients naturally assume their accountant will help them through the process, regardless of where the technical responsibility sits,” he said.
 
“You want to support clients and keep everything moving, but the time commitment is real and it wasn’t necessarily anticipated when these changes were first announced.”
 
Demetriou believes identity verification should be viewed as a permanent addition to firms’ compliance workload rather than a short-term transition issue.
 
“The danger is treating this as ‘just admin’,” he said.
 
“Small compliance tasks have a habit of multiplying. If firms don’t recognise the time, risk and responsibility involved, they can easily find themselves absorbing a significant amount of unplanned work.
 
“This isn’t really about identity verification itself. It’s about understanding the operational impact of regulatory change and making sure firms have the right processes, resources and pricing models in place to deal with it.”
 
He added: “The firms that acknowledge the reality now will be in a much stronger position to manage client expectations and protect profitability as the regime becomes part of everyday practice.”
 
ENDS