Three directors were prosecuted this month for ignoring one of the most significant reforms to hit the UK company register in a generation. Between the three of them, the total financial penalty came to £553 in fines, plus costs and a victim surcharge. One individual was fined £80.
That is the entire story in one sentence, and it is worth sitting with before getting to what the reform is actually meant to achieve, because the gap between the ambition and the enforcement is exactly the gap that businesses extending trade credit need to understand.
What actually happened
On 18 September 2026, Credit Connect reported the first convictions secured by the Insolvency Service for breaching the identity verification duty under the Economic Crime and Corporate Transparency Act 2023, heard at City of London Magistrates’ Court. Jill White and Marc Dillon, both connected to a company called White (Reading Properties) Limited, and Modinat Banjo, connected to J Isogony Apparel Limited, had continued to act as directors without completing the identity check the law now requires.
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The fines were modest by any measure. White received a £166 fine plus £85 costs and a £66 victim surcharge. Dillon received £307 plus the same costs and a £123 surcharge. Banjo received £80 plus £85 costs and a £32 surcharge. Daniel Hart, a senior criminal lawyer at the Insolvency Service, described identity verification as a legal requirement and a key part of tackling economic crime. Nobody disputes the principle. The sentencing simply has not caught up with it yet, and it may not for some time, because courts typically deal gently with the first cases under a new offence while establishing the principle, before penalties rise with volume and precedent.
Why this reform exists in the first place
Companies House spent most of its history as a filing cabinet rather than a gatekeeper. It accepted whatever information it was given, published it, and had almost no power to question any of it. Anyone could incorporate a company from a laptop in an afternoon, name any director they liked, and the register would record it without asking a single question.
The Economic Crime and Corporate Transparency Act changed the legal basis of that arrangement. From 18 November 2025, any newly appointed director must verify their identity with Companies House before they can lawfully act. Existing directors have a 12-month transition window tied to their next confirmation statement. The aim is straightforward: make the person named as a company’s director someone who has actually proven they are who they say they are, rather than a name typed into a web form.
This sits alongside the wider rebuild of Companies House into something closer to a regulator, including the registrar’s new powers to query and reject suspicious filings and last week’s news that Companies House is joining the Cifas National Fraud Database. Both changes point the same direction: a register that used to record whatever it was told is being turned into one that checks.
What three small fines do not tell you
It would be easy to read this month’s sentencing and conclude the reform has no teeth, and that conclusion would be wrong in an important way.
Criminal sentencing for a new offence almost always starts low. Courts have no precedent to sentence against, prosecutors bring the clearest and lowest-culpability cases first to establish that the offence is enforceable at all, and penalties tend to rise once a body of case law and aggravating factors accumulates. The Insolvency Service did not need large fines from these three cases. It needed a conviction, on the record, showing that ignoring the identity verification duty results in prosecution rather than a strongly worded letter. That objective has now been met.
What has not yet been tested is what happens when the person avoiding verification is not a director of a small property or apparel company who let a compliance deadline slip, but someone deliberately using an unverified or fabricated identity to operate a company built for fraud from the outset. That is the population the reform actually exists to catch, and these first three cases tell us almost nothing about how the courts will treat it.
What this means for anyone extending trade credit
None of the above should change how quickly the fines rise. It should change how you use the register today, because the reform has already created a new, checkable fact that most credit control processes are not yet looking for.
A verified director on the Companies House register has been through an identity check, either through the GOV.UK One Login service or a Companies House-authorised agent. An unverified director has not, and depending on where a company sits in the transition timeline, that may be entirely legal for the moment or may already be a breach in progress. Either way, it is now visible information, and it belongs in your onboarding checklist next to the incorporation date, the registered office, and the director’s other appointments, rather than being treated as a technicality for company secretaries to worry about.
This matters most for exactly the profile that keeps appearing in fraud prosecutions: a newly incorporated company, a director with little or no trading history, and a credit application that arrives with more confidence than evidence behind it. A director who has not verified their identity within the window the law allows is not proof of fraud. It is, however, a specific, low-cost, checkable signal, and in a credit decision made under time pressure, a signal you did not have six months ago is worth using.
The wider point
Three small fines are not the end of this story, and treating them as proof the reform is toothless would be a mistake with a shelf life of about a year. Regulatory sentencing has a well-worn pattern: modest penalties for the first, clearest cases, followed by escalating penalties as the courts, and the public, develop less patience for excuses.
The businesses that benefit most from this shift will not be the ones waiting for the fines to get large enough to matter. They will be the ones already treating identity verification status as a routine part of who they extend credit to, while everyone else is still reading three small numbers in a press release and concluding there is nothing here worth their attention.
If fraud prevention and the changing legal landscape around company identity are relevant to how your business manages credit risk, our guide to how the UK’s new fraud prevention law impacts debt recovery sets out what the wider Economic Crime and Corporate Transparency Act changes mean in practice, and what a credit control process should be checking for as the reforms continue to take effect.
Downloading our FREE ULTIMATE GUIDE TO DEBT COLLECTION is a good first step. If you want a tailored view on your specific debt, we are happy to give you the straight answer, even if that means advising against legal action. If you’re looking for a partner to step in, you can easily request a transparent quote via our PRICING PAGE.
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