Stanley Davis Group News

Anti-money laundering measures are changing 26th June - PSC register

Or are they?

The current advice from Companies House is that they still think that date is feasible but there has been a delay in passing the necessary regulations. We understand that they are due to be laid before Parliament tomorrow, 22 June.

Confirmation statements replaced the annual return last June with a new requirement to include details of persons with significant control (PSC). Initially the only way to update changes to the PSC register was by notification on the confirmation statement (unless the company had elected to keep its register at Companies House). The new regulations will oblige companies to update Companies House as the event happens. This raises the question of what a company must do if there have been changes to the PSC register since their last statement. For a short period there are two options:

1. File an updated confirmation statement immediately, or in any case before 26th June or any revised implementation date. A second and any subsequent confirmation statement in a given 12 month carries no additional filing fee.

2. File details of the changes on the new forms - PSC01 to PSC09 – as soon as possible after 26th June or the revised implementation date. These forms are meant to be filed within 14 days of the PSC event being confirmed. There will obviously have to be an exception where the event has already occurred before the new regulations come into force but until they are passed, we are not clear on how this will work in practice.

Company Restoration News – Restoring a company to receive complex fee reimbursement from RBS

Royal Bank of Scotland starts the refund process of complex fees to businesses who were placed in its Global Restructuring Group during 2008 and 2013

In November last year RBS announced that it was setting aside £400 million to set up a new complaints process and as a provision for an automatic refund of certain complex fees paid by some of the customers to the GRG between 2008 and 2013. In a recent announcement the bank announced that it has completed a review of over 4,600 customer files to establish whether they were charged complex fees whilst in GRG. It has also written to over 3000 customers regarding refunds of the fees totalling £30m.

For companies that are still on the register the automatic refund is a simple process. However a significant proportion of the companies that were served by GRG may have been liquidated or closed down and struck off the register at Companies House. In order for such companies to receive the refund they will need to restored to the register.

Shareholders of companies due a refund will have started receiving letters from RBS detailing the compensation due to the company they were a shareholder of and a notification that in order to receive the refund they need to restore the company. It is important to note that only companies that have been dissolved for less than six years may apply for restoration.

If you or your client have received such a letter and are seeking to restore a company please contact our restorations team at Stanley Davis Group. Our team have years’ of experience in restoring dissolved companies and can handle this process as quickly and efficiently as possible for you.

VAT Deadline for Con29 Charges is Near

The three-month grace period which HMRC generously granted to those local authorities who could not cope with adding VAT to their Con29 charges is nearing an end. Some authorities were able to add vat from 1st January but the vast majority could not. From April, all councils will have to charge VAT on their Con29 enquiries as this has finally been recognised as a non-statutory duty. The local land charges register is unaffected.

We expect there to be delays at certain councils over the next few weeks. Some councils are closing down now while their systems are being updated. The latest we have heard of are:

Hackney: closed to 31st March

South Ribble: closed to 31st March

Ipswich: Closed to 31st March

Wychavon: Closed TBA

Changes to the Commercial CON29DW Report

An important change takes place next month regarding water and sewerage for all non-household customers in England. As a result of a change in the law under the Water Act 2014 designed to introduce competition into the water industry, all commercial customers will be able to change their supplier. Existing water companies will still own and maintain water and sewerage networks but other services including billing, handling customer queries and complaints, and meter reading will be provided by a number of different companies - see www.open-water.org.uk for more information.

From the point of view of searches, the conveyancer may need to address the billing questions to the property owner. Such as;

  • who bills the property for water/sewerage services? - The vendor should be in a position to answer these questions.
  • Is a surface water drainage charge payable? - This will still require a search to indicate if the surface water drains to a public sewer but the vendor should be able to advise on the charges
  • There is also one question change
    • 4.4 (current): What is the current basis for charging for sewerage and water services at the property?
    • 4.4 (new): Is there a meter installed at this property?

For further details on the Commercial CON29DW and any other questions about our product range, please contact our client services manager

April Price Increases

A number of water companies and the Coal Authority have announced price increases effective from 1st April. For a list of updated prices, please contact our client services manager

Update of Changes to the PSC Regime

We are informed by Companies House that changes to Persons with Significant Control (PSC) regulation may well take place in late June this year.

At present, updates on a company’s PSCs are made once a year on the annual confirmation statement, unless the company has elected to keep its PSC register at Companies House. The new rules will make any PSC changes an ‘event-driven filing’ much like a change of director which must be notified as the event happens. The main difference will be that, whereas the form for a change of director must be filed within 14 days of the event, there is a suggestion that the time limit for a PSC change will be up to 6 months.

Since PSC information became compulsory on the confirmation statement last year, it is clear to us at Stanley Davis Group, that the rules are widely misunderstood. Our experience suggests that a very significant proportion of companies have incorrect PSC registers and the latest proposals will lead to yet more confusion and, given the six-month time limit, will not have a massive effect on improving the accuracy of the register.

The Government consultation on the subject has now closed and we are awaiting the formal outcome.

Four Reasons to incorporate your buy to let business based on legislation changes from April 2016

Please note announcements in the budget 16.03.2016 will probably not be confirmed in law until about late autumn and some may change.

  1. Limited companies will not lose tax relief on mortgage interest like individuals.
  2. Companies pay corporation tax, currently 20% and it is proposed to reduce this to 17% over the next few years. This is very attractive compared to, currently, 40% for higher rate payers and 45% for additional higher rate payers.
  3. Money can be taken out of a company by salary, subject to pay as you earn tax and national insurance contributions and realism.
  4. An alternative method is by way of dividend. However, the rules are changing from April 2016. From then on the first £5,000 is tax free, any amount in excess of this will be charged at 7.5% for a basic rate payer, 32.5% for a higher rate payer and 38.1% for an additional higher rate tax payer.

This brief summary indicates that for longer term investors, forming a limited company and holding shares rather than properties in your own name can be advantageous as there will be lower corporation tax rates payable until the investor is ready to realise the investment. In addition, the investor can choose the timing for realisation. This in itself could be easier as a time could be chosen when the investor might have no other or low taxable income and can pay themselves a salary, subject to rules set down by HMRC.

The properties do not have to be sold if you wish to realise your investment as, simply, one sells the shares in the company and you can obtain capital gains tax relief, currently £11,100.

To form a company call Lyn Bond at Stanley Davis Group, 020 7554 2214

The PSC Register – Key Facts to know before the 6th April

From April this year both private companies and Limited Liability Partnerships will have to create a new public register of People with Significant Control (PSC register). This was included in the Small Business, Enterprise and Employment Act 2015 in order to create greater transparency in the ownership and control of UK companies by allowing a full picture of both legal and beneficial ownership of businesses to be made public. This will come into force on 6 April 2016, and from 30 June 2016 the PSC register will have to be included in an annual filing at Companies House.

Stanley Davis Group will be launching a new online company formation process to coincide with the start of the register with capability to capture and file the PSC register upon incorporation.

What is a PSC?

A PSC can be an individual or a UK registered company described in the guidance as a “Registrable Legal Entity”. There are 5 conditions for being a PSC which are set out in the Act. As they apply to companies, they are:

  1. Directly or indirectly owning more than 25% of the shares;
  2. Directly or indirectly holding more than 25% of the voting rights;
  3. Directly or indirectly holding the right to appoint or remove the majority of directors;
  4. Otherwise having the right to exercise, or actually exercising, significant influence or control; and
  5. Holding the right to exercise, or actually exercising, significant influence or control over activities of a trust or firm which is not a legal entity, but would itself satisfy any of the first four conditions if it were an individual.
Table: Summary of PSC Information relating to an individual (Source Companies House)

How do I file a PSC Register?

From June 2016 companies will have to file details of their PSC register annually with Companies House as part of the new “check and confirm” process which will replace the old Annual Return

What if the PSC does not want personal information made public?

Personal information must be safeguarded as identity theft and fraud can occur using date of births and address information.

The service address will be made public so it may be preferable to use a non-residential work address. If no such work address exists for the PSC, Stanley Davis offers a service address facility

What are the key requirements for companies and PSC’s?

The new legislation requires a company subject to the PSC regime to:

  1. identify any PSCs in relation to the company and confirm certain information about them;
  2. record the details of the PSC(s) on the company's register;
  3. file their information annually with Companies House; and
  4. update the information on its own PSC register when the information changes and update the information at Companies House when the time comes for the company's annual filing.

If the company cannot immediately determine the identity of its PSC(s), it must take "reasonable steps" to identify them, and record the status of its investigations.

Individuals who are PSCs in relation to a company are themselves under a corresponding duty to notify the company of their status and to respond to any notices from the company seeking confirmation of their status.

Companies (and their officers) and PSCs are subject to criminal offences for failure to comply with their obligations. Failure on the part of a PSC to provide PSC information will give the company the option of placing restrictions on the PSC's interests in the company, so that voting rights, dividends and other rights will be suspended in relation to those interests. A company may also give notice to other persons it knows or has reasonable cause to believe know the identity of a PSC (or other person likely to have that knowledge) and those other persons also commit a criminal offence for failure to comply.

If you have any concerns or questions about the confidentiality aspects of the new PSC regime, or would like to discuss anything at all that may be of your or your clients’ concern, please do not hesitate to contact the author of this article Andrew Davis.

andrew.davis@stanleydavis.co.uk

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