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People with significant control (PSC)

The below email arrived in our inbox today from Companies House

 

 

 

Dear customer

Important changes are coming that will affect your company. This email explains the changes and tells you what you need to do.

People with significant control (PSC)

From 6 April 2016 you need to start keeping a record of the people who control your com

pany – your PSC’s. There are criminal penalties if you don’t do this.

For most companies these will be individuals who:

  • hold more than 25% of the company’s shares
  • hold more than 25% of the company’s voting rights
  • have the right to appoint or remove the majority of directors

If an individual does not meet the above conditions, check to see if you have anyone who:

  • has the right to, or actually exercises, significant influence or control over the company
  • has the right to, or actually exercises, significant influence or control over a trust or company that meets one of the above condition

From 30 June 2016 you need to provide us with the details of your PSCs. In most cases you’ll do this as part of your first confirmation statement. If you don’t have any PSCs or you’re still trying to confirm who they are, you’ll have a selection of statements to choose from.

Also if you believe any of your PSCs should be covered by our protection regime, read the additional guidance carefully for details of how they can apply to have their information protected.

Confirmation statement

From 30 June the annual return is being replaced by the confirmation statement. At least once every year you’ll need to review the information we hold about your company and confirm it’s correct or that you’re updating it at the time you make the statement. You’ll be able to do this online.

To complete your confirmation statement you’ll need to:

  • check the information we hold on your registered office, directors and location of registers. If any of these need changing update these by filing the right form
  • update your shareholder information, statement of capital and your standard industry classification (SIC codes). This can be done as part of making your confirmation statement
  • check and confirm your record is up to date
  • pay the fee

As part of your first confirmation statement you must also provide the information contained in your register of people with significant control (PSC).

If your company information changes at a later date, you can make a confirmation statement to update your record and confirm it’s correct. You can confirm your record is up to date as many times as you need to. You’ll only be charged once each year.

Read the additional guidance on our website to make sure you’re fully aware of these changes and understand what you need to do from April 2016.

Companies House

Note: This email was sent from a notification-only email address which cannot accept incoming email. Please do not reply directly to this message.

 

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BUDGET 2016

The below is the summary of the Budget as announced by the Chanellor of exchequer (HM treasurer) on 16 March 2016

Rates and allowances

2016/17 2015/16
£ £
Income tax rates – (non-dividend income)
10% lower rate tax – savings rate only Up to 5,000 Up to 5,000
20% basic rate tax Up to 32,000 Up to 31,785
40% higher rate tax 32,000 – 150,000 31,786 – 150,000
45% additional rate tax Above 150,000 Above 150,000
Personal allowance
Personal allowance those born after 5 April 1948 11,000 10,600

Corporation tax

The main rate of corporation tax is 20% and from April 2017 to 19%.

Annual Investment Allowance

The annual investment allowance is £200,000 per annum and is available for companies and for unincorporated businesses. It applied from 1 January 2016.

Dividends

Tax is payable on dividends over £5,000 at the following rates:

7.5% on dividend income within the basic rate band

32.5% on dividend income within the higher rate band

38.1% on dividend income within the additional rate band

Personal Savings Allowance

A basic rate taxpayer will be able to receive up to £1,000 of interest per year tax free on their savings.

A higher rate taxpayer will be able to receive up to £500 of interest per year tax free on their savings.

An additional rate tax payer will not have a Personal Savings Allowance.

Any amount received above these limits will be charged at the marginal rate.

Directors overdrawn loan account tax increase

Rate of tax charged on loans to participators increases. From 6 April 2016 the rate of tax charged on loans to participators (currently 25%) will increase to 32.5%.

Capital gain tax reduction

Legislation will be introduced in Finance Bill 2016 to reduce the 18% and 28% rates in those provisions to 10% and 20% respectively, subject to exclusions for chargeable gains on disposals of residential property.

Marriage allowance

This change applies from 6 April and allows for the transfer of £1,100 of a personal allowance to a spouse or partner where the transferor’s income is less than £11,000 and the recipient doesn’t pay tax at the higher or additional rate.

Employment Allowance

The Employment Allowance (Increase of Maximum Amount) Regulations 2016 increase the employment allowance from £2,000 to £3,000 while The Employment Allowance (Excluded Companies) Regulations 2016 now excludes limited companies where the director is the sole paid employee from April.

Restriction on mortgage interest deduction

Landlords will no longer be able to deduct all of their finance costs from their property income to arrive at their rental profits. The relief in respect of finance costs will be restricted as follows:

2017/18 75% allowed 25% basic rate
2018/19 50% allowed 50% basic rate
2019/20 25% allowed 75% basic rate
2020/21 Nil 100% basic rate

The end of wear and tear allowance

From 5 April 2016 wear and tear allowance and the renewable allowance for property business will be replaced by a system allowing landlords of residential property to deduct only the actual costs incurred on replacing furnishings in the tax year. Capital allowances for furnished holiday lets will not be affected.

Farmers averaging

From April 2016 the period over which they can average will be increased from the current two year years to five years.

Lifetime ISA for first home purchases

From April 2017, any adult under 40 will be able to open a new Lifetime ISA. Up to £4,000 can be saved each year and the government will pay in a 25% bonus on these contributions at the end of the tax year. The funds, including the government bonus, can be withdrawn from the Lifetime ISA from age 60 for any other purpose.

 Entrepreneurs’ relief

Entrepreneurs’ relief is available to external investors in unlisted trading companies, where a gain is made on Goodwill on Incorporation and on an ‘associated disposal’ of a privately-held asset when the accompanying disposal of business assets is to a family member.

IR35

The government will introduce in Finance bill 2017 legislation that will move the liability to pay the correct employment taxes from a worker’s own company to the public sector body or agency / third party paying the company.

 SEIS

The Scheme was not permanent, and runs until 5 April 2017. The investment limit for a qualifying individual in a fiscal year is £100,000 and cannot claim tax relief until the company has spent at least 70% of the money invested. The scheme will be affected by the new rules, which include the requirement for companies to be less than 12 years old when receiving their investment.

VAT

2016/17 2015/16
£ £
VAT
Standard rate 20% 20%
Registration threshold 83,000 82,000
Deregistration threshold 81,000 80,000

Changes to pensions

People with defined contribution schemes who are at least 55 years old can make withdrawals up to the value of the funds invested in the scheme. The first 25% will be tax free. An individual who makes a withdrawal will be restricted to making future pension contributions of no more than £10,000.

Where an individual has taken flexible benefits which include income, such as an ‘uncrystallised funds pension lump sum’ or flexible drawdown with income, and that individual wants to continue paying contributions to a defined contribution pension scheme then a reduced annual allowance of £10,000 will apply towards that individuals defined contribution benefits. The reduced allowance will apply if the individual has withdrawn more than the 25% tax free pension commencement lump sum (PCLS).

The lifetime allowance for pension contributions will reduce from £1.25m to £1m from 6 April 2016.

SDLT increases

The higher rates (3% above the current SDLT) will apply to additional residential properties purchased on or after 1 April 2016 if at the end of the day of the transaction, an individual owns 2 or more properties and has not replaced their main residence.

ATED

A new band for properties between £500,000 and £1m has been introduced. The annual charge is £3,500.

ACCA LEGAL NOTICE

This is a basic guide prepared by the ACCA UK‘s Technical Advisory Service for members and their clients. It should not be used as a definitive guide, since individual circumstances may vary. Specific advice should be obtained, where necessary.

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HMRC RATES AND ALLOWANCES 2016/17

The below are the rates and allowances as confirmed by the Chanellor of exchequer (HM treasurer) per his budget on 16 March 2016

HM Treasurer
2015/16 2016/17
£ £
Income tax rates – (non-dividend income)
10% lower rate tax – savings rate only Up to 5,000 Up to 5,000
20% basic rate tax Up to 31,785 Up to 32,000
40% higher rate tax 31,786 – 150,000 32,001 to 150,000
45% additional rate tax Above £150,000 Above £150,000
From 2008-09 10% starting rate applies to savings income only and will not apply if non-savings income exceeds threshold.
Income tax rates – (dividend income)
10% rate Up to 31,785 n/a
32.5% higher dividend rate 31,786 – 150,000 n/a
37.5% additional dividend rate Above £150,000 n/a
Income tax rates – (dividend income new rules from 5/4/2016)
Up to £ 5000 n/a 0%
£ 5000 – £ 32,000 n/a 7.5%
£32,001 – £150,000 n/a 32.5%
Above £ 150,000 n/a 38.1%
From April 2016, notional 10% tax credit on dividends will be abolished
Child benefit/Guardian’s allowance rates
Higher rate (eldest child only) (per week) 20.70 20.70
Other children 13.70 13.70
Guardian’s allowance 16.55 16.55
An income tax charge will apply to taxpayers with income exceeding £50,000 in a tax year, when child benefit is also received by them or their partner. The charge will reduce the financial benefit of receiving child benefit for those with income between £50,000 and £60,000 and remove it completely for taxpayers with income above £60,000.
Personal allowances
Personal allowance those born after 5 April 1948 10,600 11,000
Personal allowance those born between 6 April 1938 and 5 April 1948 – note 2 10,600 n/a
Personal allowance those born before 6 April 1938 – note 2 10,660 n/a
Married couple’s allowance those born before 6 April 1935 – note 3 8,355 8,355
Married couple’s allowance – minimum amount – note 3 3,220 3,220
Transferable married allowance 1,060 1,100
Micro entrepreneurs allowance
Individuals making property or trading incomes below the level of the allowance would no longer need to declare or pay tax, while those who exceeded the level from their online activity can benefit by simply deducting the allowance instead of calculating their exact expenses. n/a Allowance – £ 1,000
Income limit – note 2 100,000 100,000
Income limit for personal allowances (born before 6 April 1948) 27,700 n/a
Blind person’s allowance 2,290 2,290
Rent-a-room relief 4,250 7,500
Transferable tax allowance for married couples and civil partners 1,060 1,100
Personal savings allowance for basic rate tax payers – note 4 n/a 1,000
Personal savings allowance for higher rate tax payers – note 4 n/a 500
1 Abatement of personal allowance will apply of £1 for every £2 of taxable income in excess of income limit.

2 From 2016-17 onwards, all individuals will be entitled to the same personal allowance, regardless of the individuals’ date of birth. This allowance is subject to the £100,000 income limit which applies regardless of the individual’s date of birth

3 This allowance is subject to the £27,700 income limit. The individual’s married couple’s allowance is reduced by £1 for every £2 above the limit. That reduction only applies after any reduction to their personal allowance. The relief for this allowance is given at 10%

4 Basic rate tax will no longer be deducted from personal savings interest.

 

 

National insurance
Lower earnings limit, primary Class 1 (per week) 112 112
Upper earnings limit, primary Class 1 (per week) 815 827
Apprentice upper secondary threshold (AUST) for under 21s/ 25s 815 827
Primary threshold (per week) 155 155
Secondary threshold (per week) 156 156
Employment allowance (per year per employer) – note 2 2,000 3,000
Employee’s primary Class 1 rate between primary threshold and upper earnings limit 12% 12%
Employee’s primary Class 1 rate above upper earnings limit 2% 2%
Married woman’s reduced rate between primary threshold and upper earnings limit 5.85% 5.85%
Married woman’s rate above upper earnings limit 2.00% 2.00%
Employer’s secondary Class 1 rate above secondary threshold 13.80% 13.80%
Employer’s secondary Class 1 rate above secondary threshold (contracted out) 10.40% n/a
Class 2 rate (per week where profits are above small profits threshold) 2.80 2.80
Class 2 small profits threshold (per year) 5,965 5,965
Special Class 2 rate for share fishermen (per week) 3.45 3.45
Special Class 2 rate for volunteer development workers 5.60 5.60
Class 3 rate (per week) 14.10 14.10
Class 4 lower profits limit 8,060 8,060
Class 4 upper profits limit 42,385 43,000
Class 4 rate between lower profits limit and upper profits limit 9.00% 9.00%
Class 4 rate above upper profits limit 2.00% 2.00%
1 From April 2016 employers of apprentices under the age of 25 will no longer be required to

pay secondary Class 1 (employer) National Insurance contributions (NICs) on earnings up to

the Upper Earnings Limit (UEL), for those employees.

2 From April 2016,companies where the director is the sole employee will no longer be able to claim the
Employment Allowance

Pensions
Annual allowance 40,000 40,000
Lifetime allowance 1,250,000 1,000,000
The Finance Bill 2015 provides that from tax year 2016/17 the annual allowance for those earning above £150,000 is to be reduced on a tapering basis so that it reduces to £10,000 for those earning above £210,000. For every £2 of income above £150,000, an individual’s annual allowance will reduce by £1.
Relief’s and incentives
Enterprise Investment Scheme (EIS) – maximum 1,000,000 1,000,000
Venture Capital Trust (VCT) – maximum 200,000 200,000
Enterprise Management Incentive Scheme (EMI) – employee limit 250,000 250,000
Seed Enterprise Investment Scheme (SEIS) – maximum 100,000 100,000
Income tax relief on EIS schemes 30% 30%
Income tax relief on VCT schemes 30% 30%
Income tax relief on SEIS schemes 50% 50%
Individual Savings Account (ISA):
New ISA (NISA) limits
New ISA (NISA) annual limit 15,240 15,240
New Junior ISA investment annual limit 4,080 4,080
New child value of Child Trust Fund annual limit 4,080 4,080
Capital gains tax
Rate – basic rate tax payer – note 1 18% 10%
– higher rate tax payer – note 1 28% 20%
Annual exemptions – individuals (per year) 11,100 11,100
Certain trusts for disabled persons (per year) 11,100 11,100
Other trusts (per year) 5,550 5,550
Entrepreneurs Relief lifetime limit 10,000,000 10,000,000
Entrepreneurs Rate 10% 10%
Chattels exemption – up to 6,000 6,000
1 The 2016/17 reduction does not apply to residential property (where not covered by PPR relief)
Inheritance tax
Single persons nil rate band 1 – 325,000 1 – 325,000
Single persons 40% band over 325,000 over 325,000
Married couples or civil partnerships allowance nil rate band 650,000 650,000
Gifts to charities Exempt Exempt
Small gifts to same person 250 250
General gifts 3,000 3,000
Wedding gifts:
From: Parent 5,000 5,000
Grandparent/party 2,500 2,500
Other person 1,000 1,000
From 6 April 2012 a reduced rate of IHT of 36% will be introduced where 10% or more of the net estate is left to charity.
Business Property Relief
Business or interest in a business and transfer if unquoted shareholdings 100% 100%
Transfers out of a controlling shareholding in quoted companies, land and buildings, plant and machinery used in a qualifying company or partnership 50% 50%
Taxation of trusts
Accumulation or discretionary trusts:
Trust income up to £1,000 – dividend type income 10% Not confirmed
Trust income up to £1,000 – all other income 20% 20%
Trust income over £1,000 – dividend type income 37.5% Not confirmed
Trust income over £1,000 – all other income 45% 45%
Bare trusts:
Dividend type income 10% Not confirmed
All other income 20% 20%
Corporation tax
All profits and gains (excluding determination agreements and diverted profits) 20% 20%
Capital Allowances
Main writing down allowance (reducing balance) 18% 18%
Special rate writing down allowance (reducing balance) 8% 8%
First year allowances for certain energy-saving/water efficient products 100% 100%
Annual investment allowance 100% 100%
AIA level set permanently from 1 January 2016 at £200,000 pa
Research and Development Tax Credit Rates
SME Rate 230% 230%
Large company rate 130% 130%
Large companies expenditure credit scheme (LCEC) scheme 10% n/a
Research and development expenditure credit (RDEC) scheme n/a 11%
The RDEC scheme replaces the LCEC scheme from April 2016
Patent Box
Patent box 10% 10%
The Patent box regime will phased in from April 2013 with companies able to claim the benefit of
60% for 2013/14, 70% for 2014/15, 80% for 2015/16, 90% for 2016/17 and 100% from 2017/18 onwards
VAT
Standard rate 20% 20%
Reduced rate 5% 5%
Zero rate 0% 0%
Normal scheme registration threshold 82,000 83,000
Deregistration threshold 80,000 81,000
Cash accounting scheme -maximum to join 1,350,000 1,350,000
Cash accounting scheme – exit threshold 1,600,000 1,600,000
Annual accounting scheme – maximum to join 1,350,000 1,350,000
Annual accounting scheme – exit threshold 1,600,000 1,600,000
Flat rate scheme – maximum allowed to join 150,000 150,000
Flat rate scheme exit threshold 230,000 230,000
Annual Tax on Enveloped Dwellings (ATED)
More than £0.5m but not more than £1m n/a £3,500
More than £1m but not more than £2m £7,000 £7,000
More than £2m but not more than £5m £23,350 £23,350
More than £5m but not more than £10m £54,450 £54,450
More than £10m but not more than £20m £109,050 £109,050
More than £20m £218,200 £218,200

ACCA LEGAL NOTICE

This is a basic guide prepared by ACCA UK‘s Technical Advisory Service for members and their clients. It should not be used as a definitive guide, since individual circumstances may vary. Specific advice should be obtained, where necessary.

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Information sharing when applying for loans/mortgages

A couple of days ago, the below flew into my mailbox from HMRC;

Documents to support loan and mortgage applications- Update

In our last communication we told you about the work we have been doing with the Council of Mortgage Lenders to improve our online documents. In particular how we have improved the Tax Calculation (SA302) and Tax Year Overview so that Lenders can consider accepting them as evidence of income returned to HMRC for loan or mortgage purposes.

For guidance on this please see pages 11 & 12 of Agent Update 48

We also told you that the new process is still embedding with Lenders. Below is a list of lenders that have told HMRC they are now operating the new process (this list is provided on 3 September 2015):

 

Aldermore                             Bank of Ireland                                  Bank of Scotland

Barclays                                 Birmingham Midshires                           Britannia

Cheltenham & Gloucester  Cheshire Mortgage Corporation       Co-operative Bank

Coventry Building Society  Danske Bank                                  Ecology Building Society

GE Money Home Lending  Godiva Mortgages Ltd                Holmesdale Building Society

Halifax                                  Kensington Mortgages                          Lloyds Bank

Mortgages PLC                    National Westminster Bank          Nationwide Building Society

Nottingham Building Society           Platform                                      Post Office Ltd

Precise Mortgages               Royal Bank Of Scotland                  Saffron Building Society

Santander                            Scottish Building Society                      Scottish Widows

TSB                                           Wave Lending                                     Woolwich

 

Please note: this list is not a statement of a lender’s lending policy. You should always refer to the lender for confirmation of its lending policy at the time. HMRC emphasises you should always check which documents the lender requires before advising their clients or obtaining the necessary documentation your client’s behalf.

Kind Regards

Toni Clark

Head of Digital Agent Engagement