Changes to reporting requirements 'will not disrupt limited companies'

Tuesday 29 April 2014

Planned changes to reporting requirements for businesses will not cause too much hassle for limited company contractors, according to the PCG.

Following the announcement that the government will legislate this year to reform the area, Andrew Chamberlain, senior public affairs adviser, took the opportunity to quell the fears of the self-employed.

He claimed that while some business groups believe changing reporting will damage the competitiveness of the UK as a jurisdiction for incorporation of companies, limited company contractors have nothing to fear.

Under the changes, the government will maintain a register of 'beneficial owners', which is classed as any person with at least a 25 per cent stake in a company.

While this will affect limited companies, Mr Chamberlain claims administration will be minimal and directors will not be more exposed.

When established, the register will contain information on the beneficial owners' full name, date of birth, nationality, country or state of usual residence and residential address. Service address, date on which beneficial interest in a company was acquired, details of the beneficial interest and how it is held will also be included.

This information is then submitted to a central register that is held by Companies House and will be available for public inspection (excluding residential addresses and day of birth).

The government believes this will make company ownership more transparent, which will in turn make it easier to track the ultimate owners of UK companies to tackle crime, tax evasion and terrorism.

However, critics questioned whether the proposals will be able to meet these aims and some, such as the Law Society, believe the changes will deter some investors from forming companies in the UK.

The Confederation of British Industry (CBI) is also sceptical, claiming there could be a risk of misusing public information to target individuals.

While Mr Chamberlain believes the CBI's concern to be valid, he claims that the register will not - in practice - leave directors more exposed.

"No sensitive information will be publically available - indeed in the case of the date of birth, there will be less information shown than there is at present – but PCG will monitor closely to ensure the appropriate safeguards are in place," he wrote.

What's more, additional administration is likely to be "minimal" for limited company contractors. Mr Chamberlain believes it will in fact amount to no more than one or two extra boxes to fill in on the registration form.

However, he assures limited companies that the PCG will examine the new requirements once they have been finalised to ensure admin doesn't end up becoming too much of a burden.

Yet the Society has other concerns. Speaking when the proposals were announced in January, Jo Riddick, Marcfarlanes LLP's compliance officer for legal practice and money laundering reporting officer, said action may need to be taken to tackle other routes for illicit financing.

What's more, a large number of English trusts used for family success and tax planning could find themselves caught in the net of the new legislation.

By Victoria McDonnell

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