Changes to information requirements about people with significant control

In 2016 UK companies and UK limited liability partnerships (LLPs) were required to keep a register of people with significant control (PSC register) and to file relevant information at Companies House.

New rules have now been introduced as part of the UK’s programme implementing the EU Fourth Anti-Money Laundering Directive and tackling money laundering and the financing of terrorist activity. Effectively, businesses are required to help police the system – in this case by supplying information about people with significant control (PSCs).

The new rules potentially affect companies and LLPs. There are also changes for Scottish limited partnerships and certain Scottish general partnerships (collectively referred to as ‘eligible Scottish partnerships’).

Most of these changes come into force from 26 June 2017, with some coming into force from 24 July 2017.

Overview of changes

There are three main areas of change:

  • how companies and LLPs report PSC information to Companies House
  • changes to exemptions
  • bringing some partnerships governed by the law of Scotland into the regime.

There is information on each of these areas of change below.

Changes in reporting

There are new timescales and new forms. Previously, PSC information was updated annually on confirmation statement CS01. Change is now event-driven and must be reported to Companies House whenever it occurs. It can no longer wait until the end of the year.

From now on, companies will need to use forms PSC01 to PSC09. LLPs and eligible Scottish partnerships will use an equivalent range of forms.

When the annual confirmation statement is made, confirmation will be required that PSC information which Companies House already holds is accurate.

There are 14 days to update the PSC register, and another 14 days to send the information to Companies House. That gives 28 days to notify Companies House of changes to the PSC register.

Exemptions

Under the old rules, some companies were exempt from the PSC rules. These were DTR5 companies which are not on a regulated market.

Under the new rules, such companies may have to comply. This could affect Alternative Investment Market companies (AIM) and ISDX (ICAP Securities and Derivatives Exchange) companies.

If the company has traded on an EEA or Schedule 1 specified market, it is still exempt from providing PSC information.

Partnerships governed by Scots law

The new rules apply a modified form of the PSC regime to limited partnerships governed by the law of Scotland and also to qualifying general partnerships governed by the law of Scotland. A qualifying general partnership is a partnership in which all partners are corporate bodies.

These partnerships do not have to keep their own PSC register, but do now have to report PSC information to Companies House. They have to identify their PSCs and return this information to Companies House within 14 days of 24 July 2017.

Any further changes to PSC information must be notified to Companies House within 14 days of the change.

Confirmation that details are still current and accurate will be required annually.

Is further guidance available?

The Department of Business, Energy and Industrial Strategy has updated its guidance on the PSC register. There is draft statutory guidance on what ‘significant influence or control’ means for eligible Scottish partnerships, and guidance for people with significant control.

All the guidance can be obtained from www.gov.uk/government/organisations/companies-house.

How can we help?

This is a complex area, especially if you are coming into the regime for the first time. It can also be a risky area, as failure to comply with the rules could lead to the business, its directors or partners, or identified PSCs committing a criminal offence.

If you would like to discuss these new requirements in more detail, or require assistance with this or other company secretarial requirement please contact us on 0116 2423400

Mike Waterfield

DirectorDSC_2398.JPG

The Right to work in the UK

Do you know how to carry out a ‘right to work in the UK check?

The Immigration, Asylum and Nationality Act 2006 places a duty on employers to carry out checks to confirm someone’s right to work in the UK before employing them.

Punishments for employing an illegal worker are:

  • £20,000 for each illegal worker employed
  • Up to five years imprisonment for knowingly employing an illegal worker

Some employers may not know the specific checks and check-ups that must be used when employing a new worker:

The ‘Right to work Check’

Employers must carry out a ‘Right to work check’ on a worker before the employment begins to ensure that he or she is legally allowed to work in the UK and do the work in question. This check should be carried out on all employees to maintain accuracy and avoid any discrimination.

The ‘Right to work check’ means that an employer must check that a document, provided by the worker, is acceptable for showing the employee’s permission to work in the UK. There are three key steps to determine the check:

  1. Obtain the original version of one or more of the permitted documents
  2. Check the validity in the presence of the holder (worker)
  3. Take and retain a clear copy of the document in an un-editable format, e.g. PDF / JPEG, and record the date of the check.

These copies must be kept until 2 years after the employment ends.

List A and List B

HMRC provides two lists that show the documents required to prove a worker has the right to work in the UK. List A gives the documents that show the holder has an ongoing right to work in the UK. If an employer checks these correctly, they have an excuse against payment of a civil fine for the duration of that person’s employment.

Alternatively, List B gives documents that show the holder has the right to work in the UK for a limited time only. If an employer checks these correctly, they have an excuse against a civil penalty for a limited time. To retain a statutory excuse, another check must be carried out towards the end of this period.

HMRC’s employers guide to acceptable right to work documents explains list A and list B:

https://www.gov.uk/government/publications/acceptable-right-to-work-documents-an-employers-guide

HMRC also provide an online interactive tool on checking somebodies right to work in the UK. This should be used when carrying out the checking of documents, if extra clarification is needed:

If you have any questions on the above or would like any more information, please feel free to contact us on 0116 2423400.

Zahra Bates, Payroll Assistant 

Tax Calendar

The following Tax Events are due on 19th July 2017:

Business Tax Events

PAYE quarterly payments are due for small employers for the pay periods 6th April 2017 to 5th July 2017.

This deadline is relevant to small employers and contractors only. As a small employer with income tax, national insurance and student loan deductions of less than £1,500 a month you are required to make payment to HMRC of the income tax, national insurance and student loan deductions on a quarterly basis.

Where the payment is made electronically the deadline for receipt of cleared payment is Friday 21st July 2017 unless you are able to arrange a ‘Faster Payment’ to clear on or by Saturday 22nd July. In year interest will be charged if payment is made late. Penalties also apply.

PAYE Student loan and CIS deductions due for the month to 5th July 2017.

This deadline is relevant to employers who have made PAYE deductions from their employees’ salaries and to contractors who have paid subcontractors under the CIS.

Employers are required to make payment to HMRC of the income tax, national insurance and student loan deductions. Contractors are required to make payment to HMRC of the tax deductions made from subcontractors under the CIS.  

Where the payment is made electronically the deadline for receipt of cleared payment is Friday 21st July 2017 unless you are able to arrange a ‘Faster Payment’ to clear on or by Saturday 22nd July. In year interest will be charged if payment is made late. Penalties also apply.

Class 1A NIC due for 2016/17.

This deadline is relevant for employers who have provided their employees with benefits for 2016/17. These benefits should have been reported by the 6th July and the amount of the Class 1A employer only NI liability due calculated on the form P11D(b).

Where the payment is made electronically the deadline for receipt of cleared payment is Friday 21st July 2017 unless you are able to arrange a ‘Faster Payment’ to clear on or by Saturday 22nd July. Interest will be charged if payment is made late. Penalties may also apply. 

We have a Tax Calendar on our website so you never miss a deadline to see future deadlines please visit our calendar  https://www.torrwaterfield.co.uk/resources/tax-calendar 

COMMUNITY INTEREST COMPANIES (CIC) – DID YOU KNOW?

A CIC is the usual legal entity for operators of a social enterprise that is non-charitable.

A CIC can be set up as a normal company ie as a company limited by shares or a company limited by guarantee.

A CIC enjoys the benefit of limited liability.

A CIC must undertake an activity that fulfils a social purpose.

A CIC is allowed to pay a salary to its directors.

Paid directors are allowed to be members of the Board.

A CIC can issue loans and bonds but there may be restrictions on the amount of interest that it may pay.

A CIC can issue shares but there are restrictions on their disposal and the amount of any dividends it may pay.

Assets of a CIC may only be disposed of at open market value and the proceeds used for community purposes.

If a CIC is wound up its assets must be transferred to another body with the same restriction on asset disposal.

A CIC is covered by the same tax regime as a normal company.

A CIC is required to file its accounts at Companies House each year.

A CIC is required to file a separate report at Companies House each year detailing aspects of its activities.

If you consider we may be able to assist with the operation of your CIC or in your decision as to whether a CIC would be appropriate for you please contact us. 0116 2423400 

Richard Jeffreys, Senior Audit Manager 

The benefits of becoming an apprentice

By deciding to do an apprenticeship the transition from school into the working world was made a lot easier. I still wanted to learn and get qualifications but I found this difficult to do in a classroom as the learning was not hands-on. By doing an apprenticeship I gained intimate knowledge of the work environment which I could not have done in a classroom.

With apprenticeships there are excellent progression opportunities with different levels you can do. With the support of a skills assessor you can easily work out the best course for you, which for me was a level 2 NVQ in Business & Administration. Because the work involved in completing the NVQ was based on my job role, it was easy to complete and I could take skills I learnt from my apprenticeship and use it in my job role. I’ve now progressed on to a level 3 NVQ which I am due to finish in the next couple of weeks.

I was also able to free up some of our existing staff’s time by helping with the work they may not have currently had time to do. As well as gaining extra experience by doing this, it is also extremely helpful for Torr Waterfield and my co-workers.

The benefits of hiring an apprentice

Hiring an apprentice can make the recruitment process easier and quicker for employers as training providers will help with pretty much the entire process such as filtering CV’s, finding and recruiting an apprentice, training and accessing funding.

The wage an apprentice earns is based on their age and the sector they work in which makes it far more cost effective than hiring older, skilled and qualified staff. The cost of training can also be fully government funded or contributed to, however this again depends on the age of the apprentice and the sector your business falls within.

For more information on becoming or hiring an apprentice you can visit https://www.gov.uk/topic/further-education-skills/apprenticeships or call us on 0116 2423400 

Amy Fisher

Administrator/Reception_DSC1514

Construction Industry – Subcontractor verification changes from 6 April 2017

Construction Industry – subcontractor verification’s

HMRC have confirmed in the latest Employer Bulletin that changes will be made to the verification of subcontractors in the construction Industry Scheme (CIS) from 6 April 2017.

From 6 April 2017, contractors must use an approved method of electronic communication to verify their subcontractors. So from 6 April 2017 HMRC will no longer accept any telephone calls to verify subcontractors and from then contractors must verify subcontractors using:

  • the free HMRC CIS online service, or
  • commercial CIS software.

This change is one of a series made to CIS to increase HMRC efficiency and accuracy, and to reduce administration. HMRC are also reminding contractors that they have also introduced additional features of the online system including the ability to amend returns online, and the addition of an online message/alert service.

Please contact us for help with CIS issues. 0116 2423400

Are you a parent? What are your childcare choices?

In our Winter 2016 newsletter we led with an article about the new Tax-Free Childcare scheme that was expected to be launched in early 2017.

HM Revenue and Customs have today launched the Childcare Choices website which can be reached from the related article:

https://www.gov.uk/government/news/uk-families-will-soon-see-bills-cut-as-date-announced-for-the-launch-of-tax-free-childcare

The article also gives details of the availability of up to 30 hours of free childcare for 3 to 4 year olds from September this year.

We understand that parents can pre-register from Wednesday, with the new scheme launching at the end of April.

If you require any further information or advice then please contact us 0116 2423400 

Neil Fordintro-desktop-full

Spring Budget 2017

I am sure that you have seen the headlines in the papers this morning about the Budget and for a detailed analysis please see the report on our website:

www.torrwaterfield.co.uk/news/budget-report.

The items that have caught my attention and I think are relevant to most people are as follows:

National Insurance for the self-employed

At present, if self-employed, you pay class 2 National Insurance of £145.60 for a complete year, and class 4 at 9% based on your level of profits.  The Government do not think that this is fair as employees pay National Insurance at 12%.  To level this position, class 2 National Insurance will be abolished from 06/04/2018 and the class 4 element will increase to 10% from that date, and to 11% from 06/04/2019, thus bringing the self-employed more in line with the employed.

Dividend changes again …

From 06/04/2016 broadly the first £5,000 of dividend income is taxed at 0 % (Dividend Allowance).  This will continue until 05/04/2018.  However, from 06/04/2018 the Dividend Allowance will reduce to £2,000.  This will mainly affect the family company shareholder and increase their tax liability as follows:

Basic rate taxpayer – additional tax of £225

Higher rate taxpayer – additional tax of £975

Additional rate taxpayer – additional tax of £1,143

Individual Savings Accounts (ISAs)

 The overall limit is increasing from £15,240 to £20,000 on 06/04/2017.

Property and trading income allowances

Although this was mentioned last year it comes into play on 06/04/2017. It is as it says, so if you have property or trading income of £1,000 or less you will no longer need to declare this or pay tax on it.  This could cover small amounts of rent from Air ‘bnb’ activities or trading on ebay. 

New Childcare provisions

 If you are taking out new childcare provisions from 06/04/2017 then, instead of opting for a salary sacrifice scheme and receiving vouchers, for every 80 pence that you contribute the Government will contribute 20 pence. The maximum the Government will contribute will generally be £2,000.

Making Tax Digital

This will be introduced on 06/04/2018 for businesses, the self-employed and landlords who have profits chargeable to Income Tax and pay Class 4 National insurance Contributions where their turnover is in excess of the VAT Threshold, which will be £85,000 from 01/04/2017.

As this is a very new area please contact us for further information.

Salary Sacrifice

 From 06/04/2017 this is changing, but it is still beneficial for both the employer and employee to sacrifice salary in respect of employer provided pensions, childcare vouchers, workplace nurseries and cycle to work schemes. 

Construction Industry

The government are launching a consultation on 20 March 2017 to look at various areas, including the qualifying criteria for Gross Payment Status and options to combat VAT supply chain fraud in supplies of labour.

In addition to the above, certain other changes come into force on 06/04/2017 that have been mentioned in earlier Budgets namely:

Restrictions on residential property interest

Landlords will no longer be able to deduct all of their finance costs from their property income.

Inheritance Tax residence nil rate band

There will be an additional nil rate band for deaths on or after 06/04/2017 where an interest in a main residence passes to direct descendants.

As mentioned above I have only mentioned the areas that I believe will be most relevant to the majority of our clients but other areas can be found on our website.

Please contact us if you have a specific query. 0116 24243400

Julia Harrison, Tax ManagerJulia Harrison April 2012

More Personal Tax to pay in January 2018?

No one wants to pay more tax, but from 6th April 2016, individuals who receive dividends will be taxed under new legislation. To explain how much this new measure could cost you we have created a short helpful video. 

Please visit our YouTube channel here to watch.  

Having viewed the video, if you would like to know how this will personally affect you in January 2018, please click here. 

Have you paid your self-assessment bill?

Tax Payments – How late can you be?

With the madness of the January tax return deadline, it may have slipped some of your minds to actually pay your self-assessment bill. If this is the case then you may be wondering how you will be penalised for doing so.

For those that have filed their self-assessment tax return before the deadline but have not paid the bill, there will be interest accruing at 2.75% pa for the first 30 days.

However, after 30 days from the deadline the full amount of tax due will be subject to a 5% penalty. This means that if you had a liability of £5,000 unpaid by midnight on 2 March 2017, there would be an immediate fine of £250 added to your account.

Similarly, if after 6 and 12 months from the filing deadline you have not paid the full balance, then there would be additional 5% penalties on the tax outstanding at those dates.

Furthering the example above, should there still be an outstanding debt of £5,000 on 1 August 2017 then an additional £250 penalty will be accrued and if the debt has still not been settled by 1 February 2018 then another £250 will be added. This means that within just 12 months, a £5,000 tax bill will have penalties totaling £750.

On top of this there will also still be interest accruing on both the tax and penalties. Making the estimated amount owing on 1 February 2018 £5,887.

Sam Jefferson, Accounts & Tax 

If you need further help please contact us.