Showing posts with label partnership. Show all posts
Showing posts with label partnership. Show all posts

Monday, August 7, 2017

Additional Reporting Requirements for PSC

From the 26th of June onward information on people with significant control (PSC) won't be updated on the confirmation statement (form CS01) on a yearly basis anymore. Instead, one needs to inform Companies House using new forms (forms PSC01 to PSC09) whenever there’s a change.

You have 14 days to update your PSC register and another 14 days to send the information to Companies House. Companies House will need to be informed if anyone (or any entity):
  • becomes a PSC
  • ceases to be a PSC; or
  • their details change, such as the extent of their control or their address. 
This will make the requirements for PSCs very like those of company officers, where changes to a director or secretary have been filed on an event-driven basis for some time. This update to the information required about PSCs arose due to a change in anti-money laundering legislation; the spirit of which is aimed at increasing the transparency of ownership and control of companies in the UK and ensuring the information is more current.

Friday, November 1, 2013

Director's Loan Accounts: beware if overdrawn

A director's loan is a loan made by a company to a director (or related party). HMRC has been trying to prevent directors to borrow money from their business because this is money they would have to draw either as salary or dividends otherwise and pay tax and NI on those amounts.

In 2010 HMRC published the Corporation Tax Act 2010 and section 455 put in place some rules to prevent the practice: if a close company makes a loan to a relevant person who is a participator in the company or an associate of such a participator and if this loan is outstanding at year end, then 25% of that loan will have to be paid under Corporation Tax to HMRC -- unless the loan is reimbursed before tax is due (usually 9 months after the year end). Moreover, if at any point in time, the loan balance is above £5,000 the whole loan becomes a benefit in kind for the director.

Friday, October 14, 2011

Class 4 NI refunds for sleeping partners

A “sleeping partner” is a partner who does not take any part in the running of the partnership’s business. HMRC now accepts that such a partner is not liable to Class 4 NIC, because they do not fall within the definition above. Class 4 National Insurance contributions are paid as a percentage of your annual taxable profits - 9 per cent on profits between £7,225 and £42,475, and a further 2 per cent on profits over that amount.

In the past, there has been a reluctance to classify a partner as a “sleeping partner”, particularly in the case of the standard husband and wife partnership. This was because there was a fear that HMRC would argue that the sleeping partner was not really entitled to their profit share, and that as a result the active partner had made a “settlement” on the sleeping partner by consenting to their having a share of profits they had not “earned”. The fear was that HMRC would therefore seek to tax the active partner on the profits diverted to the sleeping partner – often with the result that those profits would be liable to income tax at 40% instead of the 20% they suffered in the hands of the sleeping partner.