New Rules on PSC Registers

As of April 2016, most UK limited companies and limited liability partnerships (LLPs) have been required to hold and maintain a register of people with significant control. The PSC Register as it is known must be filed with Companies House on incorporation and as part of a company’s annual confirmation statement as of June 2016.

With the regime only still fairly new, it has come as something of a surprise to the business world that changes have already been introduced as of 26^th June 2017.

EU Fourth Money Laundering Directive

These changes have come about as part of the EU Fourth Money Laundering Directive (MLD4) covering anti-money laundering and anti-terrorist financing measures. Whilst the UK is still part of the UK, the laws will apply.

Companies House has decided that the accuracy and completeness of current PSC data needs to be improved. Companies will therefore now be required to report any changes to their PSC information in real time as they happen, rather than wait until the annual confirmation statement is submitted.

The changes dictate that where there is a change to the information, companies will now have a 14-day timescale during which they must update their PSC register, plus a further 14 days in which to notify Companies House. The forms to be used are PSC01 (give notice of individual person with significant control) and PSC09 (give notice of update to PSC statements.

Support Available from Companies House

Companies House has issued a statement saying that for those companies requiring additional support in understanding the PSC regime, there will be individual assistance, particularly for those known to have submitted incorrect PSC information. Further guidance will be issued by Companies House, as well as a ‘report it now’ link being added to its website.

The Regulations governing these changes are yet to be released, but are expected very soon. Guidance notes are also awaited and we will share these as soon as they emerge. Be sure to follow us on Twitter and regularly check back to our news feed to keep up to date.

How to Protect Your Business Against Cyber Attacks

The worldwide cyber-attack that brought the NHS to its knees recently has definitely reiterated the threats faced by businesses working in the modern digital environment.

The much publicised attack made use of hacking tools to spread ransomware known as ‘WannaCry’. Not only did it affect the NHS, but also global shipping outfit FedEx as well as more than 300,000 computers over 150 countries. Cybersecurity company F-Secure described it as ‘the biggest ransomware outbreak in history’.

WannaCry made its way in through emails that had been designed to trick the recipient into opening attachments primed to release malware onto their system. Affected computers locked up files and encrypted them, making them inaccessible to users unless they made a payment using bitcoin. The trouble was, even if payment was forthcoming, there was no real guarantee that access would be restored.

Microsoft released a patch in March this year to fix a vulnerability that WannaCry exploited. However, not everyone installs updates as soon as they become available, which left the vulnerability exposed.

When it came to casualties of the attack, the NHS came off worst. Hospitals and GP surgeries nationwide fell into chaos with patient systems and medical records inaccessible. Other victims included FedEx, Portugal Telecom and Spain’s Telefonica together with German railway Deutsche Bahn.

How to Protect Against Cyber Attacks

It is essential to make sure all software is kept updated. The updates that are made available usually incorporate security patches, which means ignoring them or putting them off is very risky.

Vigilance with emails is also crucial. Looking out for suspicious messages that contain links or attachments should be the norm right across the organisation, with strict parameters set as to what to do and what not to do. As well as employees, make sure outsourced staff and subcontractors are aware of your rules about links and attachments in emails and that they know the risks of downloading programs, apps and software from unofficial or non-secured sources.

Dealing with Cyber Attack Risks

Cyber risk insurance is an astute choice for any business. It is designed to restore an organisation to its complete operational status as quickly as possible following an attack.

Cyber risk insurance covers the policy holder for malicious attacks, cyber extortion, denial of service and human-error data breaches. Depending on the small print, it can provide legal guidance, business interruption cover, public relations advice, IT forensics, data restoration and cover for lost profits.

Hackers are finding new inroads on a daily basis. Make sure your business is safe and covered for this very real risk. If you need practical advice, you can always talk to your local bookkeepers.

Digital Signatures Now Permissible by law

The process of obtaining written signatures on contracts has long been a serious challenge for businesses in the B2B sector. It can lead to lowered productivity, difficulties in closing deals and delayed projects.

Electronic signatures have been used for many years, but they have long been questioned from a legal point of view, which has led business owners to put off relying on them.

The good news is, however, that in 2016, a significant milestone came about concerning the adoption of e-signatures. The new Regulation on Electronic Identification and Trust Services for Electronic Transactions in the Internal Market (eiDAS) was law as of July, and at the same time, The Law Society and The City of London Law Society published a practice note, endorsing the use of e-signatures.

Running a business in this day and age makes you fully aware of how going digital can bring numerous advantages across all manner of elements of your operation. But when it comes to digital signatures, you could well have found yourself frustrated, especially as the legality of these signatures has been less than clear. The e-Signature Directive has been around since 2000, however the fact that individual EU member states have been able to decide for themselves as to how it could be implemented nationally meant inconsistencies were rife.

The new practice note has, thankfully, brought with it a much more clarified understanding of the legal requirements when it comes to using electronic signatures, which means they are now legally sound for use in contracts under English law.

The Benefits of Electronic Signatures

The electronic signature delivers a host of advantages including efficiency and cost savings. Manually signed documents mean printing, scanning and posting, but none of this is necessary with the e-signature. Contracts get signed far more quickly, which means far fewer delays in getting deals closed and projects commenced.

Another benefit is that electronic signatures leave a digital audit trail which makes it easier to remedy disputes. Digital signature platforms like DocuSign and HelloSign allow the verification of the signatory, giving details of who signed the document, when and where. These audit trails mean businesses can demonstrate any necessary compliance with regulatory parameters and data protection legislation. The audit trails are also legally admissible under the Electronic Communications Act 2000.

Electronic signature platforms also deliver secure cloud storage for all documentation, and providing they are certified to ISO 27001, they will ensure you are conforming to security management standards.

‘Digital signatures’ are an advanced type of electronic signature, noted by the Regulation as ‘qualified electronic signatures’. This type of electronic signature is supported by a digital certificate courtesy of the platform provider which verifies the identity of the signatory. Digital signatures are preferred by sectors such as banking, as the added security and advanced level of identity checking are most important in these areas.

If you are thinking about using e-Signatures for your business contracts but are not sure about whether they will be legally binding, why not contact your local bookkeepers for advice?

New Inheritance Tax Allowance Sparks Good News for Direct Descendants

On 6^th April 2017, amendments were made to inheritance tax law courtesy of the new ‘residence nil rate inheritance tax break’ came into operation.

The new ‘nil rate band’ applies where a residence passes to a direct descendent. This means a child, grandchild or great-grandchild, etc. including an adopted child, foster child or step-child. Where direct descendants are inheriting an estate incorporating a main residence and the total value of the estate exceeds the IHT threshold of £325,000, they should now pay a lower amount of inheritance tax.

Previously, all beneficiaries, including direct descendants, would have to pay 40 per cent tax on anything inherited that exceeded £325,000. However now direct descendants get additional tax relief via the nil rate band which provides a top-up of £100,000 per person during 2017-2018. This will rise to £125,000 during 2018-2019 and then increase again to £150,000 during 2019-2020. £175,000 will be the top up once we get to 2020-2021, and then consumer price inflation (CPI) will take over how the figure rises over the years that follow.

In a nutshell, this means that by 2020, direct descendants of couples leaving an estate valued at less than £1 million will have no inheritance tax to pay at all.

Transfers and Tapering

The nil rate band is transferable by means of a claim to a surviving spouse or civil partner when not used. If the deceased had downsized or ceased to own a home on or after 8 July 2015, then descendants can claim to use the nil rate band if they inherit a residence or assets to the same value up to the limit of the nil rate band.

For estates that exceed £2 million and above, a tapering rule applies. It works by tapering away the additional nil rate band by £1 for every £2 over £2 million. So if an estate is worth more than £2.2 million, then the £325,000 IHT threshold will apply.

Main residences held in discretionary trusts will not usually form part of the estate and the nil rate band will not therefore apply, even if the property is being left to direct descendants.

Time to Review Your Will?

It is quite a complex set of rules and even lawyers concur that the conditions are highly complicated and need a good degree of understanding so that they can be made to work in the most effective way for particular situations.

If you are leaving your estate to direct descendants, you should most certainly be reviewing your will in light of the new nil rate band. Making a will is especially important if you are a business owner, so be sure to consult with a solicitor if you have not yet made one, or need to update the one you have.

The Importance of Having a Dynamic Lockdown Strategy

Now the UK’s threat level has been raised to critical, businesses really should be listening to the Government’s advice to develop a ‘dynamic lockdown’ strategy. Here we look at what a dynamic lockdown strategy involves and how you can go about preparing one.

What is Dynamic Lockdown?

Dynamic lockdown is a system of procedures focused on dynamically locking down premises in response to a fast moving attack happening either on the premises or in the immediate surrounding area.

Lots of businesses and public buildings are employing these procedures with the aim of protecting their premises and the people in or near them should an emergency situation arise.

What is the Aim of Dynamic Lockdown?

The objective of dynamic lockdown is to impede access by unwanted intruders and to prevent anyone who happens to be inside, such as workers or visitors, moving way from the zone of safety. Businesses that are located in areas of high public footfall are also making provision for offering their premises as a safe haven for people passing by who may be seeking shelter during an incident. This actually happened amongst various pubs and restaurants during the recent attack in London who took people in and locked down the premises until the danger had passed.

What Does a Dynamic Lockdown Strategy Involve?

In developing a dynamic lockdown strategy you will need to consider how to swiftly lock down all access and egress points. This includes doors, gates and windows plus loft hatches, skylights, basements and ducts. It is important to combine safety with flexibility so that there is a contingency should a need for evacuation arise. Both physical and electronic security measures should be included together with a strategy for zoning off areas of the property so that separate areas can be locked down independently.

The strategy should also allow for staff education so that everyone is aware of how dynamic lockdown works in practice. Teaching staff to be vigilant is also a wise move so that they know the reporting procedure for suspicious behaviour. The entire strategy should be planned in conjunction with security professionals.

We join the nation in expressing our sadness and concern over the recent events. From a practical perspective we should be looking at doing whatever we can to help secure ourselves, those we work with and everyone in the vicinity of our premises.

Employers of Non EEA Workers Now Facing Increased Costs

From 6 April 2017, the Immigration Skills Charge Regulations 2017 are in operation. These Regulations call for sponsoring employers of migrant workers employed under Tier 2 of the points-based immigration system to pay a new charge known as the ‘Immigration Skills Charge’. Here we answer the most commonly asked questions on the subject.

What is the Immigration Skills Charge?

The Immigration Skills Charge (ISC) is now levied upon all voluntary and private sector employers of more than 250 staff. The charge will be £1,000 per certificate of sponsorship per year and there are concessions for charities and smaller businesses which will pay a reduced rate of £364.

The ISC is payable on top of the cost of the certificate of sponsorship. Other fees, including the Immigration Health Surcharge plus visa application fees, some of which have also increased as of 6 April, are also payable in addition.

Are There any Exemptions?

Exemptions apply to Tier 2 migrants sponsored before 6 April 2017 applying from inside the UK to extend their visa; Tier 2 migrants employed in a specified PhD level job; Tier 2 graduate trainees taking the Intra-Company Transfer route; Tier 2 migrants remaining with the same or a different sponsor; international students switching from Tier 4 student visas to Tier 2 working visas, and dependents of Tier 2 workers.

Why has the Charge Been Introduced?

The ISC is intended to decrease the number of businesses employing migrant workers, hoping that they will instead recruit and train British staff so that the UK continues to attract talented students and the most highly qualified migrants. There is also the goal of protecting the country’s leading reputation for education and research.

Is Anything Else Changing?

As well as the introduction of the ISC, the minimum salary threshold for workers sponsored under Tier 2 (general) has increased from £25,000 to £30,000 per annum. The threshold for UK-based graduates will not change from £20,800.

On the contrary, the minimum salary for non-European Economic Area (EEA) graduate trainees coming to the UK via the Intra-Company Transfer has dropped from £24,800 to £23,000 per year. This would suggest that the Government has given due consideration to businesses transferring overseas branch workers to their UK offices.

The Government may in future also decide to levy a similar charge to the ISC on employers of EU nationals, if UK immigration minister Robert Goodwill’s proposal is accepted. However, business leaders are up in arms about the suggestion, so it may well be side lined.

With Brexit looming and the Government not stepping forward to reassure employers as to the situation with their existing EU workers, uncertainty is rife.

Should anything concrete arise we will of course let you know. In the meantime, should you have any queries concerning how to deal with employing migrant workers, why not seek advice from your local bookkeepers?

What You Need to Know About Making Tax Digital

Chancellor Philip Hammond’s March Budget was pretty much all doom and gloom although the backtracking on the self-employed National Insurance Contributions hike was a welcome relief.

One other glimmer of hope came in the shape of a delay to the introduction of the Making Tax Digital (MTD) regime which means that the self-employed, buy-to-let landlords, sole traders and small businesses that fall below the VAT threshold of £85,000 (as of 1 April 2017) will have an extra year to get ready for MTD. There is also a promise on the part of the government to consult on the design elements of tax administration in an attempt to streamline the system for taxpayers.

What is Making Tax Digital?

Making Tax Digital was brought in with the March 2015 Budget. It has a goal of transferring all tax records to a digital system. HMRC feels that putting the tax filing process into an automated system will lead to better quality record keeping which in turn should lessen the occurrence of mistakes and therefore boost revenue.

Under MTD, every person – including employed workers as well as the self-employed - will be given their own Digital Tax Account which they will be able to access online to view how much tax has been paid and how much is due. It is hoped that third parties like banks and building societies will link in with the digital account so that income can be automatically fed into it.

Also under MTD, unincorporated businesses earning more than £10,000 per year will have to submit tax information including a summary of income and expenditure on a quarterly basis. Businesses will also have to maintain digital accounting records using a system that is able to communicate with HMRC’s systems.

What MTD does not mean, and what has been widely misunderstood, is quarterly tax return filing. It is simply a summary needed four times per year. The aim for the system is that it will assist businesses in keeping on top of their tax positions throughout the year, which will help planning around finances and taxes.

What is the Timescale for Making Tax Digital?

The quarterly filing required under MTD was originally due to start from April 2018 with businesses under the VAT threshold first to start with the regime. However, this deadline has been put back to April 2019 meaning the smallest businesses have an additional year to get ready for the changes. For businesses above the VAT threshold, the deadline remains unchanged at April 2018. Furthermore, from April 2019, all VAT payments will have to be processed through MTD.

If you are concerned about MTD or digital filing, why not discuss the matter with your local bookkeepers? They’ll be able to guide you through all the necessary steps and will ensure you stay on course to meet the deadlines.