It might be a hassle, but this new legal requirement could finally push repeat phoenixers out of the industry

Companies House has announced a new legal requirement for company directors and people with significant control to verify their identities. It came into force from November 2025.

The immediate reaction from many in financial services has been fairly consistent. Why has it taken this long?

Still, there is cautious optimism that the change could finally help expose directors who repeatedly phoenix companies, a long-standing and deeply frustrating problem within the advice sector.

For those lucky enough not to have encountered it directly, phoenixing occurs when an authorised firm shuts down and a new firm emerges in its place, often with the same people in control. Assets move across. Liabilities do not.

The original firm ceases trading or enters insolvency, leaving unresolved consumer claims behind. The cost is then picked up by the Financial Services Compensation Scheme or, worse, by clients themselves.

The Financial Conduct Authority describes this as “polluting behaviour”. Firms cause damage, externalise the cost of their mistakes, and undermine confidence in the market while everyone else pays the bill.

The regulator has been clear that it wants to clamp down.

“We want polluters to pay for the liabilities they create so customers and market participants can feel confident about doing business with authorised firms,” the FCA has said.

It also wants a level playing field, so firms that do the right thing are not undercut by those who quietly walk away from the consequences.

The Companies House changes are not part of the FCA rulebook, but the hope is that greater transparency around who is actually behind companies will support the same objective. It becomes harder to pretend you were not involved when the register says otherwise.

From 18 November 2025, several changes come into effect.

• New directors will need to verify their identity to incorporate a company or be appointed to an existing one

• Existing directors will need to confirm their identity at their next annual confirmation statement, during a 12-month transition period

• Existing people with significant control will need to verify their identity within 12 months of the new regime starting

Companies House says the process should boost confidence in the UK corporate system by making it clearer who is setting up, running and controlling companies.  

Accurate data, it argues, benefits businesses of all sizes and makes fraud harder.

Between six and seven million people are expected to verify their identity by mid-November 2026. For most, it should be a one-off process that takes only a few minutes. From November 2025, directors and PSCs will also be able to see verification deadlines for all their roles directly on the Companies House register.

Louise Smyth, chief executive of Companies House, says identity verification will play a key role in improving data quality and tackling misuse of the register.

Companies House is already contacting firms with guidance, and more than 300,000 people have verified their identity during the voluntary phase, which began in April.

Stephen Perkins, managing director at Yellow Brick Mortgages, said the process itself was straightforward. His bigger question was why it was not introduced years ago.

“Verifying my identity with Companies House was quick and easy. This is something that should always have been in place,” he said.

He also highlighted what many advisers will be quietly hoping.  “Hopefully it will clearly show those directors who consistently phoenix their companies.”

For advisers, this is not about box-ticking. It is about fairness.

Those who run compliant businesses, meet liabilities, and clean up their own messes have long watched repeat offenders disappear and reappear under new names.  

Anything that makes that harder is likely to be welcomed, even if it adds another admin task to the list.

In practical terms, firms may want to:

• Check who needs to verify and when. Especially for group structures and multiple directorships.

• Build verification into compliance calendars early. Leaving it until confirmation statement season is rarely a good idea.

• Use the register properly. Greater transparency cuts both ways. Due diligence should become easier.

• Explain the change internally. Directors and PSCs should understand why this matters beyond compliance.

• See it as progress, not punishment. If you are not planning to phoenix anything, this is largely a non-event.

The identity checks may be mildly inconvenient. But if they help push serial phoenixers out of the industry, most advisers will happily tolerate a few extra minutes of admin. Some hassles are worth it.

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