Change is the only constant thing in this world – and it’s true not just in life, but also in business. Case in point: the UK’s new company law.
The UK Government has rolled out new rules to keep a check on economic crime while boosting corporate transparency. Now, before you go into a panic mode, let’s get one thing clear – this applies to every Tom, Dick, and Harry in the business world, not just you.
So let’s talk through the details surrounding the “Economic Crime and Corporate Transparency Bill”. Sounds like a mouthful, doesn’t it? Essentially, this snazzy piece of legislation is about pushing companies towards more transparency. In layman’s terms, the powers that be want to peek behind the curtain and see who’s pulling the strings in your business.
However, the intention here isn’t to put businesses under surveillance, it’s to squash economic crime by making it tougher for shady individuals to play hide and seek behind businesses. Yes, this does mean that you’ll have to jump over a couple of new hurdles, but hey, what’s business without a little bit of a challenge?
The Impact of Increased Transparency on your Business.
So, you’re probably wondering how this ramped-up transparency is going to affect your business? First off, brace yourself for a tad more paperwork. You’ll be laying your cards on the table, revealing a bit more information to the government, and keeping a tighter record of all your business affairs.
With everything out in the open, customers, suppliers, and even investors might be more inclined to jump on board with your business, knowing that you’re sticking to the straight and narrow. Remember, people gravitate towards honesty. By opening up and showing that your business has nothing to hide, you’re building a solid foundation of trust and reliability.
Here are they key changes being introduced:
Improving the quality of data on our registers
- From 4 March 2024, greater powers for Companies House to query information, stronger checks on company names, new rules for registered office addresses, and new lawful purpose statements.
Identity verification
- Anyone setting up, running, owning or controlling a company in the UK will need to verify their identity.
Changes to accounts
- Transitioning towards filing accounts by software only, and changes to small company accounts filing options.
- This is going to be a game changer, and we expect more businesses will be adopting software in their businesses than ever before.
Confirmation statement changes
- From 4 March 2024, new requirements to provide a registered email address and to confirm that the intended future activities of the company will be lawful.
Changes to Companies House fees
- Increasing fees to take new future expenditure into account, as well as making sure costs are recovered from existing expenditure.
Protecting your information
- Individuals will be able to apply to suppress personal information from historical documents, and apply to have personal information protected from public view because of risk of harm.
Changes to limited partnerships
- Limited partnerships will need to file their information through authorised agents, and they’ll need to file more information with Companies House.
Improving transparency of company ownership
- New requirements to provide additional shareholder information, and restrictions on the use of corporate directors.
Investigation, enforcement and data sharing
- More effective investigation and enforcement powers for Companies House, and new powers to share data with law enforcement agencies and other government departments.
Navigating Tax Planning in the Light of These Changes
Here’s the thing, when we talk about transparency, we’re not just talking about knowing who owns the company or where the funds are flowing. We’re also talking about the taxman. Yep, you’ve guessed it – with more transparency comes more tax scrutiny. You can expect the tax authorities to take a magnifying glass to your books.
Right now, you’re probably thinking that tax planning is about to turn into one massive headache. I get it. But, don’t hit the panic button just yet. There’s a flip side to this coin that could actually work in your favour, essentially, you can use this as a chance to get your finances ship-shape. To begin, start by asking the right questions:
- Are you making the most out of your deductions?
- Are you structuring your finances in the most tax-efficient way?
The key here is to be proactive rather than reactive. Seek professional advice and get ahead of the curve. Yes, this might seem like an extra expense, but think of it as an investment. The right advice could save you a pretty penny in the long run, and ensure your business is more resilient and prepared for whatever comes your way.
And remember, the intention behind these changes isn’t to make your life difficult. It’s to ensure businesses are playing by the rules, and that tax evasion and avoidance is not an option. So, see this as an opportunity to demonstrate that your business is on the level.
We hope this information has made you less stressed about the upcoming changes, if you have any questions or need support, get in touch today.
