Remaining compliant following the 4th Money Laundering Directive

Kelly Cosgrove

Since the fourth Money Laundering Directive (4MLD) came into force in June 2017, there has been some knock-on effects on the filing requirements for Limited Companies and LLPs.

You may remember that back in June 2016, the Annual Return was replaced by the Confirmation Statement and the Persons of Significant Control Register (PSC).  All companies were required to take reasonable steps to identify the company’s PSCs and create and maintain a register of these individuals or companies (Relevant Legal Entities).

The PSCs’ details were then to submitted along with the confirmation statement. Any changes to the company’s PSCs were to be notified once a year on filing of the confirmation statement unless the company had elected for Companies House to hold and maintain its register.

However, just as companies and their advisors were getting the hang of these new reporting measures, the 4MLD introduced more changes.

The most prominent change, and one that will affect most clients, is the reporting frequency of any changes made to PSCs.

This has reduced from being an annual requirement to being required within 28 days from the date of the change. Companies will have 14 days to update their register once notified of any changes and a further 14 days to notify Companies House of the change. This action has been taken to ensure that registers are kept up to date and are ‘current’ during the year rather than a ‘snapshot’ at one point in time.

The changes that need to be reported to Companies House via specific forms within 28 days include:

  • Change in nature of control (e.g. if the PSC acquires or sells shares)
  • Change to a PSC name or address
  • Change to the name of an RLE
  • If a PSC ceases to be a PSC

Companies House has recognised that the move to maintaining the PSC register has proved difficult for some, and the filing requirements may not have been fully understood or interpreted correctly by companies. As a result, Companies House plans to contact businesses whose PSC appears incorrect to help them comply. They will also be updating their PSC guidance and adding a ‘report it now’ button for those who experience problems when accessing information on the public register.

If you do require any assistance in preparing your Confirmation statement or Persons of Significant Control register or would like advice on how to update your details with Companies House, contact our Company Secretarial Department on 01254 688 100.

Class 2 National Insurance Contributions

National Insurance shutterstock_15678070


Traditionally self-employed individuals paid their Class 2 National Insurance contributions via six monthly bills or regular direct debits. If an individual’s profits were, or were expected to be below the small earnings threshold they could apply for the small earnings exception.

The Office of Tax Simplification recommended that the Government review the way National insurance is collected for the self-employed, in order to make it simpler, more straight forward and to reduce the administration burden.

Following the review, it was decided that Class 2 National Insurance will be collected under the self assessment system in the same way that Class 4 National Insurance is currently collected.

What does this mean for me?

If you were paying your contributions by direct debit you may have noticed that your last payment was taken on 10 July 2015.

Your liability to Class 2 will be calculated at the end of the tax year alongside the preparation of your self assessment tax return and any amounts due will become payable the 31 January following.

For example, your liability for the 2015/16 tax year will be calculated when your tax return is prepared and will be payable alongside your Income Tax and Class 4 National Insurance on or before 31 January 2017.

The amount of Class 2 National Insurance due will still be calculated at a flat rate (2016/17 – £2.80 per week) with reference to how many weeks of self employment the individual has undertaken during the year.

Those with no profits chargeable to tax or profits below the new ‘Small Profits Threshold’ – £5965 2016/17 (which replaces the Small Earnings Exception) will no longer have to apply in advance for an exception from paying Class 2 National Insurance, as liability will not automatically arise.

However, in some cases you may still want to make payments voluntarily to retain your rights to certain benefits such as Employment and Support Allowance, Maternity Allowance, Jobseekers Allowance and your State Pension.

The contribution criteria for claiming each of these benefits is different therefore if it may be likely that you will need to claim any of these benefits in the near future and you are not automatically liable to make class 2 contributions please contact a member of the Tax Department to discuss voluntary contributions.

If you have gaps in your National Insurance record you may not be able to claim your full state pension when it comes to retirement.

If you would like to check for any gaps in your national insurance record you can do that here:

Spreading the cost

For those that would like to continue to spread the cost of their Class 2 National Insurance over the year HM Revenue and Customs have proposed that they set up a ‘Budget Payment Plan’, to make regular payments in advance, when doing this it is important to specify that the payment is for Class 2 National Insurance otherwise HM Revenue and Customs will set it against your self assessment record. Information how to set up a budget payment plan can be found here:

Persons of Significant Control Register


What’s new?

Under new government legislation from 6 April 2016 each and every Limited company is required to maintain a register of Persons of Significant Control (PSC).

The PSC register is to be submitted on an annual basis to Companies House when submitting the Confirmation Statement and will be available to the general public for viewing or is to be made available on request from the public.

Whilst the register must be maintained from the 6 April 2016 the first time it will be submitted is after the 30 June 2016 when the Confirmation Statement is brought into effect.

What’s a Person of Significant Control?

The guidance from Companies House shows that for someone to qualify as a PSC one of the following conditions must be met:

  1. An individual who holds more than 25% of shares in the company.
  2. An individual who holds more than 25% of the voting rights in the company.
  3. An individual who holds the right to appoint or remove the majority of the board of directors.
  4. An individual who has the right to exercise, or actually exercises, significant influence or control over the company.
  5. A trust or firm which would satisfy conditions 1) to 4) were it an individual.

Conditions 1) to 3) can be met directly or indirectly. A condition is met indirectly where an individual holds their rights through another company or trust.

If any individual meets the above conditions then they need including on the PSC register.

What does the register look like?

The register can be a hand written register or it can be held electronically, i.e. an excel or word document, but it must contain the following information on each individual:

  • Name.
  • Date of birth.
  • Nationality.
  • Country, state or part of the UK where the individual usually lives.
  • Service address (this is in effect a correspondence address, we suggest using the companies registered office).
  • Usual residential address (this must not be disclosed when the register is made available for inspection and will not be disclosed by Companies House).
  • The date the individual became a PSC (default date should be 6 April 2016 if individual would have been a PSC before this date).
  • Which conditions are being met, i.e. i) to v)
    • If conditions i) or ii) are met then they must disclose which category they fall under; Over 25% up to 50%, More than 50% and less than 75%, 75% or more.
    • The register only needs to state if an individual meets condition iv) if they do not meet one of the conditions i) to iii).
  • Whether an application has been made for an individual’s information to be protected from public disclosure (this application can only be made if there is a threat of violence of intimidation).

What next?

The register must be kept up to date by the company.

The register must be submitted on an annual basis to Companies House along with the Confirmation Statement (the replacement to the Annual Return).