GovWire

This opinion covers the impact assessment (IA) for The Registrar (Identity Verification and Authorised Corporate Service Providers) Regulations 2024, laid in draft before Parliament on 22 May.

To help strengthen the UKs position on tackling economic and organised crime, the proposals would introduce requirements for UK-registered entities to ensure that their directors (and other responsible individuals) undertake identity verification. This, to improve clarity over who is setting up, or managing, a corporate entity, as well as to provide powers to the registrar (i.e., Companies House) to allocate unique identifiers to verified individuals. The proposals also seek to strengthen the level of checks on intermediaries who undertake activity on behalf of others.

The Department has provided an updated assessment of the quantified impact of the secondary legislation, building upon that which was made prior to introduction of the parent primary legislation - the Economic Crime and Corporate Transparency Act 2023. The analysis utilises updated evidence, and an improved understanding of how the proposals will be implemented, to refine the estimates of the cost that businesses would face. The possible disproportionate impacts upon small and micro businesses are clearly acknowledged in the IA, which addresses why it is proposed that these businesses should not be exempt from the regulations.

The main costs identified (and quantified) by the Department are familiarisation costs for affected businesses, as well as costs faced by these businesses in complying with the requirements to undertake identity verification. The IA identifies, but hasnt monetised, the benefits of the proposals to be improvements in the reliability and accuracy of the information on businesses held by Companies House, and the knock-on benefits of that for law enforcement and tackling economic crime. The Department estimates that the EANDCB of the proposals to be 19.5 million and the net present value to be -167.5 million.