Episode 300

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Published on:

30th Nov 2025

Identity Verification: What Businesses Must Know in 2025

Identity verification is the legal process of confirming that a person or organisation is who they say they are. It helps prevent fraud, tax evasion, money laundering, terrorist financing, and abuse of financial systems. Businesses must prove that clients are legitimate before providing services — especially when risk is higher.

When Identity Checks Are Required

  • When onboarding new clients
  • If risk levels change or suspicious activity appears
  • Before offering regulated professional services
  • When payment behaviour or ownership suddenly changes
These checks are not optional. Failure to verify identity can lead to penalties, account freezes, investigations, reputational damage, and criminal consequences.

Acceptable Proof of ID & Address

Proof isn't just a name written in an email — it must be documented. Typical verification includes:
  • Passport or driving licence
  • Recent utility bill or council tax statement
  • Bank statements showing address
In some cases, enhanced checks (E-KYC) are required — such as source of funds, ownership structure, or AML screening.

Risk-Based Assessment Matters

Not all clients have the same level of risk. Businesses should apply stronger verification when:
  • Clients operate internationally
  • Payments vary unexpectedly
  • Large or unusual transactions occur
  • Clients come from high-risk industries
Good record-keeping protects you. Compliance is not just a legal obligation — it's a financial safeguard.

Record Keeping Requirements

Keep ID documents securely for a minimum of five years. Store clean digital audit trails in accounting systems, encrypted drives, or secure cloud platforms. Never hold data informally in WhatsApp chats or desktop folders.

Consequences of Getting It Wrong

If identity verification fails or is ignored, businesses risk:
  • HMRC penalties
  • Financial loss from unpaid invoices
  • Regulatory investigation
  • Permanent reputation damage
Preventing risk is cheaper than fixing mistakes later.

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About the Podcast

I Hate Numbers: Simplifying Tax and Accounting
Helping you and your business make more profits and reduce your anxiety
For some, watching paint dry, or a poke in the eye is better than dealing with their business numbers. I get it, numbers can be scary, confusing, and boring, not what your business is meant to be about.

But here’s the thing. If you’re serious about your business, you need to grab hold of your numbers, and connect with them. Falling in love with them may feel weird, but at least be on friendly terms with them if you want your business to survive and thrive.

Numbers make you accountable, showing you the financial impact of your successes, a route map to success and highlighting those flip-ups. Above all, learning to love & use your numbers means you have a better chance of making money, what’s not to love.

Fundamentally business is there to make money. You need to make money to survive and have impact. It’s about knowing how your future is going to pan out.

As a business finance coach, financial story teller and tax advisor, I've helped thousands of businesses over the years.

I love numbers, but I get it that not many businesses will do so. I want to share my love of numbers through my podcast, to make it accessible, to help you and your business power forward.

My aim is to make this podcast listener friendly, jargon and BS free.

In the words of W.E.B. Dubois “When you have mastered numbers, you will in fact no longer be reading numbers, any more than you read words when reading books. You will be reading meanings.”

About your host

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Mahmood Reza

Hi, my name is Mahmood, accountant, educator and author of the book, I Hate Numbers !!
I actually love numbers and what they can do for my business – and every business - but I come across so many people who have a real fear of numbers/maths/accounts (and accountants), and therefore, their business struggles to survive, never mind thrive. If only they knew how to get a fondness and some kind of control of those numbers!
Why am I so passionate about all of this stuff I’m putting out into the public domain? It’s my belief that once you understand what your numbers are, where they come from, and what they mean, you can use them to make better decisions and ultimately make (or keep) more money. What every business owner wants, right?
The one thing I’ll always guarantee you, is that whether you’re the CEO of a global corporation, or a market stall trader in your local town, your numbers matter – and you simply can’t get away from them. This book is your chance to get them all in one place, face your fears, and start making those numbers work for you.