Economic Crime and Corporate Transparency Act

The Economic Crime and Corporate Transparency Act (ECCTA) introduces new compliance requirements for charities and charitable companies, including mandatory ID verification for trustees and directors. In addition to the extant Corporate Liability for Senior Managers offence (brought into effect in 2023), which introduced the possibility of criminal liability for charities of any size if a senior manager of the organisation commits an offence under ECCTA, as of September 2025 an additional Failure to Prevent Fraud offence exists for large charities (defined as those with two of; turnover > £36m, balance sheet > £18m, >250 employees). Under the new provisions of the legislation, an organisation can be held liable if a person ‘associated with’ the charity commits fraud (such as misappropriation of public funds or money laundering offences) with a view to benefitting either the organisation or somebody closely associated with it.

Similarly, new provisions of ECCTA brought into place as part of its Companies House reform program will have an effect on charitable companies or subsidiaries of charities needing to file financial statements with the public registrar. Beginning in spring 2025, there is now a requirement for company directors, or trustees or agents looking to file financial statements or otherwise interact with Companies House on behalf of a company, to verify their identity. Please see our fact sheet on this topic.

The registrar also now has the option to reject or challenge filings which appear suspicious or contain errors, as well as annotate the register to highlight relevant information to the public. The latter could include disqualifications under sanctions law, non-compliance notices or details of strike-off proceedings.

These measures aim to enhance transparency and prevent misuse of charitable structures for illicit purposes. The Act also increases scrutiny of charity trading subsidiaries and strengthens governance expectations. Charities must ensure that their leadership teams are prepared to meet these new obligations, which may involve updating internal policies and systems. Similarly, charities must carefully review their anti-fraud measures and, importantly, ensure that an anti-fraud culture is embedded throughout the entity as a compliance failure in this area could result in penalties or even loss of charitable status. The Act underscores the importance of robust governance and due diligence in maintaining sector integrity.

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If you have any questions, then please feel free to get in touch with Michaela Johns on 023 8046 1256 or email Michaela Johns.