New Companies House powers

The recently introduced Economic Crime and Transparency Act has gifted Companies House a range of new powers aimed at reducing exploitation by corporate entities to pursue illegal enterprise.

The aim of the new reforms are:

  • Introducing identity verification for all new and existing registered company directors, People with Significant Control, and those delivering documents to the Registrar. This will improve the accuracy of Companies House data, to support business decisions and law enforcement investigations.
  • Broadening the Registrar of Companies House’s powers so that the Registrar can become a more active gatekeeper over company creation and custodian of more reliable data, including new powers to check, remove or decline information submitted to, or already on, the companies register.
  • Improving the financial information on the register so that the register is more reliable, complete and accurate, reflects the latest advancements in digital technology, and enables better business decisions.
  • Providing Companies House with more effective investigation and enforcement powers and introducing better cross-checking of data with other public and private sector bodies. Companies House will be able to proactively share information with law enforcement bodies where they have evidence of anomalous filings or suspicious behaviour.
  • Enhancing the protection of personal information provided to Companies House to protect individuals from fraud and other harms.
  • Broader reforms to clamp down on misuse of corporate entities.

In addition to the above, the bill will:

  • enable businesses in certain situations to share information more easily for the purposes of preventing, investigating or detecting economic crime by disapplying civil liability for breaches of confidentiality for firms who share information to combat economic crime;
  • enable proactive intelligence gathering by law enforcement and strengthening the National Crime Agency’s Financial Intelligence Unit’s (FIU) ability to obtain information from businesses relating to money laundering and terrorist financing by removing the requirement for a pre-existing Suspicious Activity Report (SAR) to have been submitted before an Information Order (IO) can be made; and
  • focus private sector and law enforcement resources on high value activity, reducing the reporting burden on businesses and enabling greater prioritisation of law enforcement resource by expanding the types of case in which businesses can deal with clients’ property without having to first submit a Defence Against Money Laundering (DAML) SAR.

As more information on the detail of how these changes will impact SMEs, we will post further updates on this newsfeed.

Source:Other | 06-05-2024

Cyber protection laws introduced

New consumer protections against hacking and cyber-attacks came into force at the end of April 2024. All internet connected smart devices will be required by law to meet minimum-security standards. 

Manufacturers will be legally required to protect consumers from hackers and cyber criminals from accessing devices with internet or network connectivity – from smartphones to games consoles and connected fridges – as the UK becomes the first country in the world to introduce these laws.

Under the new regime, manufacturers will be banned from having weak, easily guessable default passwords like ‘admin’ or ‘12345’ and if there is a common password the user will be promoted to change it on start-up. This will help prevent threats like the damaging Mirai attack in 2016 which saw 300,000 smart products compromised due to weak security features and used to attack major internet platforms and services, leaving much of the US East Coast without internet. Since then, similar attacks have occurred on UK banks including Lloyds and RBS leading to disruption to customers. 

The move marks a significant step towards boosting the UK’s resilience towards cyber-crime, as recent figures show 99% of UK adults own at least one smart device and UK households own an average of nine connected devices. The new regime will also help give customers confidence in buying and using products, which will in turn help grow businesses and the economy.

An investigation conducted by Which? showed that a home filled with smart devices could be exposed to more than 12,000 hacking attacks from across the world in a single week, with a total of 2,684 attempts to guess weak default passwords on just five devices.

Source:Other | 06-05-2024

Tax Diary June/July 2024

1 June 2024 – Due date for corporation tax due for the year ended 31 August 2023.

19 June 2024 – PAYE and NIC deductions due for month ended 5 June 2024. (If you pay your tax electronically the due date is 22 June 2024).

19 June 2024 – Filing deadline for the CIS300 monthly return for the month ended 5 June 2024. 

19 June 2024 – CIS tax deducted for the month ended 5 June 2024 is payable by today.

1 July 2024 – Due date for corporation tax due for the year ended 30 September 2023.

6 July 2024 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2024 – Pay Class 1A NICs (by the 22 July 2024 if paid electronically).

19 July 2024 – PAYE and NIC deductions due for month ended 5 July 2024. (If you pay your tax electronically the due date is 22 July 2024).

19 July 2024 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2024. 

19 July 2024 – CIS tax deducted for the month ended 5 July 2024 is payable by today.

Source:HM Revenue & Customs | 06-05-2024

Hiring customs agents

Customs declarations can be difficult and time consuming to complete. Businesses can make their own custom's declarations; however, this is complex and requires specialist skills and software. 

Most businesses use a specialist such as a customs agent, broker, freight forwarder or fast parcel operator to submit import and export customs declarations on their behalf. HMRC publishes a regularly updated list of customs agents and fast parcel operators who may be able to help.

The list is known as the register of customs agents and fast parcel operators and has recently been updated. It should be noted that businesses on these lists are not vetted, approved or recommended by HMRC and proper due diligence should be used. 

HMRC’s guidance is clear that if your goods do not have the right paperwork, or if information is incorrect or missing, your goods may be seized, and you may face delays and have to pay extra charges. 

If you are moving goods between Great Britain and Northern Ireland, the free Trader Support Service can also help guide you through the necessary processes. This service can also help businesses who import goods into Northern Ireland from the rest of the world. The use of this service is optional. 

Source:HM Revenue & Customs | 29-04-2024

Business rates relief in England

Business rates are a tax on non-domestic premises, including most commercial properties such as shops, offices, pubs, warehouses and factories. The money raised through business rates is used to help fund local services like the police, fire and rescue services.

Business rates are generally calculated by multiplying the rateable value of commercial premises by the business rates multiplier before any eligible reliefs are deducted. Business rates are treated differently in England, Wales, Scotland and Northern Ireland and the rates relief schemes vary across the UK.

In England, you may be eligible for business rates relief if your business is:

  • a small business
  • a retail, hospitality and leisure property – for example, a shop, restaurant, entertainment venue or hotel
  • the only business in a rural area
  • a charity or a community amateur sports club
  • a local newspaper

You may also be eligible for business rates relief if:

  • you own a property and it’s empty, partly empty or being refurbished
  • you make certain improvements to your property
  • your rates change by more than a certain amount at revaluation
  • you will get less small business or rural rate relief after 1 April 2023
  • you are in financial difficulty
  • your property is in an ‘enterprise zone’
  • your property is in a ‘freeport’
  • your property is a heat network

Local councils can also choose to offer business rates relief to businesses that benefit the local community or economy. Contact your local council to find out if this is available in your area and check if you are eligible.

Source:HM Revenue & Customs | 29-04-2024

Directors who are liable for unpaid tax

HMRC has the power to make directors personally liable for paying the tax debts of companies they have been involved in under certain limited circumstances. This can also apply to certain other individuals associated with a company.

A joint and several liability notice tells the recipient that they are personally responsible, along with the company and anyone else issued with a notice, to pay the penalty amount raised against the company.

There are a number of important conditions that must be met before HMRC can issue a notice. The underlying legislation applies to liabilities relating to any period that ended on or after 22 July 2020. 

Directors could receive a joint and several liability notice in cases of:

  • tax avoidance and tax evasion;
  • repeated insolvency and non-payment cases; and
  • facilitating avoidance or evasion, for example, helping others to avoid or evade paying tax due.
Source:Other | 29-04-2024

Self-employed tax basis period reform

The self-employed tax basis period reform has changed the way trading income is allocated to tax years. Under the reforms, the tax basis period has changed from a ‘current year basis’ to a ‘tax year basis’.

This means that all sole trader and partnership businesses must now report their profits on a tax year basis, beginning with the self-assessment return due by 31 January 2025 (covering the tax year 2023-24) and future years.

Under the old rules there could be overlapping basis periods, which charged tax on profits twice and generated corresponding ‘overlap relief’ which was usually given on cessation of the business. The new method of using a ‘tax year basis’ has removed the basis period rules and prevents the creation of further overlap relief. 

The changes do not affect sole traders and partnership businesses who draw up annual accounts to a date between 31 March and 5 April. These businesses will continue to file as usual for the 2023-24 accounting year and beyond. 

The new rules will come into effect in the current 2024-25 tax year with the previous 2023-24 tax year known as the ‘transition year’. During the transitional year, all businesses’ basis periods will have been aligned to the tax year and all outstanding overlap relief used against profits for that tax year.

Any excess profit (after overlap relief) covering more than 12 months, is known as ‘transition profit’. The transitional profit will be spread by default over 5 tax years from 2023-24 until 2027-28.

Source:HM Revenue & Customs | 29-04-2024

New tips guidance published

New rules that stop employers from withholding tips from people working in the hospitality, leisure and services sectors are a step closer following the publication of a new Code of Practice on tipping.

The Employment (Allocation of Tips) Act 2023 colloquially known as the Tipping Act received Royal Assent on 2 May 2023. However, the measures in the Act do not come into force until all the necessary secondary legislation is in place. The measures are expected to come into force on 1st October 2024, once Parliament has approved them.

This means that more than 2 million workers will have their tips protected. HMRC has estimated that this new law will mean an estimated £200 million a year will go back into the pockets of hard-working staff by retaining tips that would have otherwise been deducted.

The statutory Code of Practice will provide businesses with advice on how tips should be distributed among staff. The updated Code of Practice will be statutory and have legal effect, meaning it can be introduced as evidence in an employment tribunal.

Workers will also be given new rights to view an employer’s tipping policy and their tipping record, which will help them to bring forward a credible claim to an employment tribunal.

The Business and Trade Minister said:

‘It is not right for employers to withhold tips from their hard-working employees. Whether you are cutting hair or pulling a pint, this government’s legislation which will protect the tips of workers and give consumers confidence that when they leave a tip, it goes to the hardworking members of staff.’

Source:Department for Business and Trade | 29-04-2024

VAT boost to charitable donations

The government is looking to introduce a new relief that would provide a VAT boost to charitable donations. The new VAT relief would be designed to encourage businesses to donate everyday items to charities without creating a VAT liability. A 12-week consultation on the proposed changes will be launched before 23 July 2024.

Under the current rules, firms do not pay VAT on any goods they donate which are then sold on, such as clothes, hygiene supplies and cleaning products. However, if these goods are not sold but are instead distributed free of charge to those in need VAT must be accounted for. 

The proposed relief would help encourage donations of low value household goods such as:

  • hygiene items (soap, toothpaste, toothbrushes, shower gel, toilet rolls)
  • second hand items from hotels (such as sheets, kettles)
  • cleaning supplies – including laundry detergent

The new VAT relief will not include goods which are donated to charities for the charity to use, such as new IT equipment, in order to prevent any possible VAT avoidance.

The result of the consultation and confirmation of any changes will be announced at a future fiscal event.

Source:HM Treasury | 29-04-2024

Post Office Offences Bill to be extended

The Government has tabled amendments to expand the territorial extent of the Post Office Offences Bill. Convictions resulting from the Post Office Horizon scandal in Northern Ireland will now be within scope.

This blanket exoneration will automatically quash convictions brought about by the scandal, including 26 in Northern Ireland, clearing the names of many people who have had their lives ruined.

As in England and Wales, convictions in Northern Ireland will need to meet a set of criteria before they are quashed, including:

  • Prosecutions brought about by the state prosecutor or the police.
  • Offences carried out in connection with Post Office business between 1996 and 2018.
  • Were for relevant offences such as theft, fraud and false accounting.
  • Were against sub-postmasters, their employees, officers, family members or direct employees of the Post Office working in a Post Office that used the Horizon system software.

Postal Affairs Minister Kevin Hollinrake said:

” We always carefully consider the territorial extent of each piece of legislation and are rigorous in our commitment to devolution. However, it has become apparent that the Northern Ireland Executive does not have the ability to rapidly address the 26 convictions known to be within its purview.

It has become clear that postmasters in Northern Ireland could have their convictions quashed significantly later than those who were convicted in England and Wales, which would be unacceptable.

This follows the decision to introduce landmark legislation – which is making its way through parliament – to quash the convictions of hundreds of innocent sub-postmasters wrongly convicted as a result of the Horizon scandal. This will speed up the financial redress process – where we are offering a £600,000 fixed sum which can be administered quickly for those who accept it.”

Source:Other | 29-04-2024