Verifying a Residential Address under UK AML Requirements

Under the UK Money Laundering Regulations (MLRs), when forming a limited company, especially via a formation agent or accountant, you must perform Customer Due Diligence (CDD). This includes confirming the identity and residential address of the beneficial owners, directors, and possibly PSCs (Persons with Significant Control).

To meet these requirements, the residential address must be verified using independent and reliable sources. This isn’t just a matter of collecting an address; it must be validated in a way that meets regulatory standards.

Understanding Customer Due Diligence

Customer Due Diligence (CDD) is a critical process in the formation of a limited company. It ensures that all individuals involved are properly identified and their residential addresses are verified. This process helps prevent fraud and money laundering activities, safeguarding both the business and its stakeholders.

Electronic Address Verification (eIDV via Credit Agencies)

Most AML-compliant firms and platforms now use electronic identity verification (eIDV) systems. These systems query databases from credit reference agencies like Experian, Equifax, or TransUnion.

These systems attempt to verify:

• That the individual exists

• That the name, date of birth, and address match

• That the address has been linked to the individual via financial or public data

  
  

In practice, if the individual has a credit history (bank accounts, loans, phone contracts, etc.), the system can often confirm their address instantly.

Most regulators accept a two-source match (e.g. credit data + electoral roll) as sufficient. eIDV is considered a gold standard for AML purposes, especially when the system confirms multiple data points.

The Importance of the Electoral Roll

In the UK, the Electoral Register is a key source for confirming residential address. If an individual is registered to vote at their home address, it can be electronically matched by eIDV providers or accessed manually.

Formation agents and regulated professionals often rely on this data in combination with credit bureau records. A match on the electoral roll provides strong evidence of UK residency at a specific address and is widely accepted under AML rules.

If a client isn’t on the register (for example, a foreign national or someone who opted out of the open register), alternative verification is needed.

Documentary Evidence (When eIDV Fails or Is Inapplicable)

Where electronic verification is not possible — for example, if the person has no UK credit file, is newly arrived in the UK, or is a foreign national — AML regulations allow the use of original or certified documents to confirm a residential address.

Acceptable documents include:

• Utility bill (gas, electricity, water) dated within the last 3 months

• Recent bank or credit card statement

• UK driving licence (only if not used to verify identity)

• HMRC correspondence

• Local council tax bill

• Tenancy agreement or mortgage statement

  
  

These documents must be recent and clearly show both the individual’s name and full residential address. They must be genuine (i.e., no screenshots, emails, redacted information, or photocopies unless certified).

In higher-risk situations (e.g. if the client is from a high-risk jurisdiction), further steps such as notarised documents or in-person verification might be needed.

Government & Utility Data (Supplemental Sources)

Advanced verification systems or compliance teams may also verify address details against:

• DVLA (Driver and Vehicle Licensing Agency) records

• HMRC or DWP data (for UK nationals receiving benefits or pensions)

• Utility/telco records (mobile phone contracts or broadband accounts)

  
  

Software platforms (like SmartSearch or Veriphy) often include these databases indirectly through their data partnerships. Such sources can be especially helpful for verifying clients without a credit history but who still maintain official accounts at their home address.

What AML-Compliant Address Verification Must Achieve

To meet UK AML obligations for verifying a residential address when incorporating a company, you must:

• Verify that the claimed address exists and is valid

• Confirm that the individual is genuinely associated with that address

• Use either electronic verification or certified documentary evidence

• Retain records of the verification for at least 5 years

• Ensure the data source is independent and reliable

  
  

Merely collecting an address is not sufficient — it must be confirmed.

How Formation Agents Typically Handle This

If you're using a professional company formation agent regulated by HMRC or the FCA for AML purposes, they will typically:

• Run an eIDV check on the director/shareholder’s personal details

• Use providers like SmartSearch, or similar tools to confirm address and identity

• Request proof of address documents if the electronic check fails

• Store and encrypt the verification records for compliance

  
  

If the Individual Is Not UK-Based

For non-UK residents forming a UK company, address verification becomes more complex. eIDV usually won't work, so you’ll typically need:

• A certified proof of address document from their country of residence

• Sometimes, a notarised translation if the document is not in English

• Possibly, enhanced due diligence (EDD) if they are from a high-risk jurisdiction

  
  

The formation agent must judge whether the verification meets UK standards, even if the document is from overseas.

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Final Notes on Address Verification

For AML purposes, the residential address must be verifiably linked to the individual using reliable data or documents.

If using a formation agent, expect to either pass an electronic check or submit proof of address.

You should never use a business address, PO box, or forwarding address unless the person actually resides there — that would breach AML compliance.

The Importance of Compliance

Compliance with AML regulations is crucial for maintaining the integrity of the financial system. It protects businesses from potential legal issues and enhances their reputation.

By ensuring that all residential addresses are verified, companies can operate with confidence, knowing they are adhering to legal standards.

Conclusion

In conclusion, the process of verifying residential addresses under the UK Money Laundering Regulations is essential. It involves various methods, including electronic verification and documentary evidence.

By understanding these processes, businesses can better navigate the complexities of compliance and ensure they meet all necessary regulations.

For more information on compliance and address verification, consider consulting with a professional who specializes in AML regulations.