New powers to increase fraud prevention scrutiny on large UK businesses
From 1 September 2025, UK businesses face stricter compliance requirements under the Economic Crime and Corporate Transparency Act (ECCT). This landmark legislation introduces tougher fraud prevention obligations on organisations, with potentially severe consequences for those who fail to adhere.
What changes under ECCT?
The Act establishes a new offence of failure to prevent fraud. This means that a business can now be held criminally liable if fraud is committed by someone acting on its behalf - even if senior leadership was not directly involved.
Those covered under the Act include:
- Employees
- Subsidiaries
- Agents
- Other "associated persons"
If a fraudulent act is committed and the business is deemed to have benefited, the organisation itself may face prosecution, reputational damage, and significant financial penalties.
Which businesses are affected under ECCT?
The ECCT initially applies to “large organisations” meeting at least two of the following criteria:
- More than 250 employees
- Annual turnover above £36 million
- Total assets exceeding £18 million
While smaller businesses fall outside the immediate scope, the Act signals a broader regulatory direction - and future expansion to medium-sized entities has not been ruled out.
What should businesses be doing now?
With the ECCT now taking effect, companies should be reviewing and strengthening their internal fraud prevention measures. Regulators and enforcement agencies are expected to take a proactive approach, and it is likely that the number of investigations will rise sharply now the legislation is in force.
Key steps to consider include:
- Conducting fraud risk assessments to identify vulnerabilities
- Reviewing and updating internal controls, systems, and reporting lines
- Ensuring staff training and awareness around fraud risks and responsibilities
- Establishing clear procedures for reporting concerns or suspicions
We’re here to help
Our Forensic Accounting team works with businesses to ensure their fraud prevention frameworks are robust, proportionate, and compliant. Specialist support covers:
- Assessing risk exposure across systems, policies, and personnel
- Identifying weaknesses that could expose the business to liability
- Providing practical recommendations to strengthen fraud controls
- Delivering ongoing support to embed secure, sustainable protocols
This expertise is not limited to businesses falling under the ECCT definition of “large organisations.” Any company concerned about fraud prevention can benefit from proactive safeguards.
