A leading expert in online contracting technology has welcomed a move by HMRC to recognise electronic signatures.
The development was welcomed by Steven Tallant, Chief Executive of Liverpool-based digital contracting software developer Videosign.
He said:
“Recognising electronic signatures is a big step in the right direction by HMRC and is especially important at a time when reducing face-to-face interactions is so important.
“However, use of the electronic signature is open to abuse and HMRC has warned that it may seek assurances from agents that signatures are genuine.
“It’s important that appropriate evidence is gathered by agents to ensure that invalidated documents do not cause unnecessary delays, and to protect their clients from fraud.”
Acceptance of the electronic signature is becoming more widespread in the UK since 2019, when the Law Commission confirmed the legal validity of documents signed digitally.
UK law now allows the digital signature to be used for all contracts except for deeds and wills.
Deeds can be signed online providing the process is witnessed in person. Wills still require a ‘pen and ink’ signature but the law allows for the witnessing to take place electronically.
HMRC’s announcement follows a similar decision by the Land Registry in July which paved the way for reduced reliance on paper documents and ‘pen and ink’ signatures in conveyancing transactions.
Tallant said:
“Use of electronic signatures is a developing area and I expect the use of this technology to continue to grow, even when lockdown restrictions are removed, due to the convenience and extra security it offers.
“Professionals in the finance industry would be well-advised to adapt to this change, but should take steps to ensure that compliance and security issues are addressed to avoid delays or litigation.”
Videosign, which moved to the UK from New Zealand in 2019, has developed unique software that uses facial recognition technology to verify the identity of signatories and records video evidence of a document signing taking place.