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These few weeks since the EU Referendum will go down in history as one of the most tumultuous periods in UK political history.
We have a new Prime Minister and Chancellor of the Exchequer but the economic uncertainty created by the vote to leave European Union remains. This is especially true for the small businesses and entrepreneurs who, for instance, do not have the infrastructure and resources to hedge against their foreign currency exposure.
As a result, we call on the new Chancellor, Philip Hammond, to support enterprise by restoring the small profits rate of Corporation Tax and setting it at 15% and, further, to lock this rate at 5% lower than the main rate. We ask you to endorse our campaign by signing our Parliamentary Petition.
The small profits rate of Corporation Tax was first introduced in 1973 by the Conservative Chancellor, Anthony Barber. It is a salutary lesson of how times have changed as, at that time, the main rate of Corporation Tax was 52% and the small profits rate was 42%!
Over the next four decades, these differential rates were reduced until in the 2011-12 tax year, they were 26% and 20% respectively. In that year, companies with profits of up to £300,000 were entitled to this reduced rate with a marginal relief for companies with profits between £300,000 and £1,500,000.
Since then, the main rate of Corporation Tax has been steadily reduced but the small profit rate remained the same until, from 1st April 2015, essentially, there has been a harmonised rate Corporation Tax rate of 20%.
According to the House of Commons Library, in 2015 there were 5.4 million businesses in the UK. Of these, a staggering 5.1 million business, 95% of the total, are deemed to be micro-businesses with fewer than ten employees.
For the overwhelming majority of the incorporated businesses, the reality of the erosion of the small profits rate is that their last reduction in Corporation Tax was in 2011.
In these uncharted times, we urge the government to support this lifeblood of the British economy that accounts for 33% of employment. Implementing this proposal would have a tangible impact.
If our Parliamentary Petition can secure 10,000 signatures from British citizens or UK residents, this guarantees a government response and 100,000 signatures would mean that the proposal would be considered for debate in parliament.
Thank you for your support.
A significant change for the overwhelming majority of companies, Societas Europaea and Limited Liability Partnerships incorporated in the United Kingdom came into effect from 6th April 2016 under the Small Business Enterprise and Employment Act.
From that date, a company must have a Register of ‘People with Significant Control’ (PSC) and keep it up-to-date. Since 30th June, this information is reported to Companies House as part of the new annual Confirmation Statement that has replaced the Annual Return. For details on the Confirmation Statement, please click here.
The purpose of this change is to lift the veil of who owns and controls companies in the United Kingdom.
For the vast majority of companies, their PSCs will simply be individuals who:
In exceptional circumstances, there may be:
For each PSC, the company must verify and hold on the Register the following information:
Remember, the PSC Register must be made available to anyone on request so it is vital to hold the information in such a way that the residential address can be suppressed.
The golden rule is that a company’s PSC Register can at no time be empty.
If your company has not collated and verified the information for your PSC, the Register is required to state:
“The company has not yet completed taking reasonable steps to find out if there is anyone who is a registrable person or a registrable relevant legal entity in relation to the company.”
Similarly, it is perfectly possible for a company to have no PSCs, for example where it is equally owned by five individuals. In this case, the Register is required to state:
“The company knows or has reasonable cause to believe that there is no registrable person or registrable relevant legal entity in relation to the company.”
More on what constitutes a relevant legal entity later but first what it deemed to be ‘significant influence or control’.
Significant influence is deemed to be where a person can ensure that the company generally adopts the activities they desire whereas control is where a person can direct the activities of the company. This is the case irrespective of whether the person achieves any economic benefit.
An example of significant influence or control would be a person who, whilst not on the board, regularly influences a significant section of the board or is regularly consulted on board decisions.
Another would be a company founder who, whilst no longer having a significant shareholding, continues to influence other shareholders on how to vote.
On the other hand, significant influence or control is not intended to apply to a person that provides advice or direction in a professional capacity. Nor does it apply to a person for merely being a director of a company.
By definition, a PSC is an individual. However, if your company is owned or controlled either fully or in part by another legal entity, the details of this legal entity must be included in the PSC Register, if it meets both the relevant and registrable tests.
A legal entity is relevant in relation to your company, if it meets any one or more of the conditions for a PSC and either:
A relevant legal entity (RLE) is registrable for your company if it is the first RLE in the ownership chain.
If the legal entity is not deemed relevant, the most likely case being if it is an overseas privately-owned company, it is not in itself registrable.
However, the details of the individuals or RLE who ultimately have a majority stake in that legal entity, either directly or indirectly, must be recorded on the PSC Register.
CooperFaure provides a comprehensive Company Secretarial service for our clients and, especially if your company has a more complex share rights or ownership structures, would be pleased to review this for you. Please email us at tax@cooperfaure.co.uk for an initial, free consultation.
Since 30th June 2016, the required filing of an annual Confirmation Statement has replaced the Annual Return at Companies House.
The overall rationale remains the same, for a company to ensure that the information included on the public Register of Companies is current and correct.
However, instead of this being by the company providing an annual snapshot on a particular date, as was the case with the Annual Return, the Confirmation Statement is to check and confirm that the information held is accurate.
In addition, as part of the first Confirmation Statement, the information held on your PSC Register for people with significant control will need to be added.
Certain changes can be made within the Confirmation Statement:
For any other changes, such as the location of the Registered Office or the updating of a Director’s details, the requisite form will need to be completed and submitted at the same time as your Confirmation Statement.
The fee for the Confirmation Statement will be the same as for the Annual Return, £13.00 when filed online or £40.00 when filed on paper.
This fee covers a twelve-month period and, during the twelve months, you are entitled to file as many Confirmation Statements as necessary without having to pay the fee again.
In terms of timing, if your last Annual Return was made up to 31st August 2015, the review point for the first Confirmation Statement will be 31st August 2016. Please be aware that, whilst the Annual Return offered a twenty-eight date grace period for filing, this has been reduced to fourteen days for the Confirmation Statement.
For the example above, the Confirmation Statement must be filed by 14th September 2016.
If you would like any further information, please contact us at tax@cooperfaure.co.uk.
Broadly speaking, Intellectual Property (IP) can be applied to something unique that has actually been created by a person or people. An idea in itself does not qualify as IP.
Once you have IP, there are various methods of protecting it against theft or plagiarism depending on whether the IP is an invention, a product, a brand name, a design or a document. Copyright, patents, designs and trade marks are all types of intellectual property protection.
Copyright protection is applied automatically on writing and literary works, art, photography, films, television, music, web content and sound recordings.
Patents, design registration and trade marks have to be applied for and your IP may need more than one of these protections. For instance, you may wish to register the name and logo with a trade mark and apply for a patent on the invention itself.
It is important to bear in mind that registering a trade mark on a product name or logo or registering a design are relatively quick processes that take a few months whereas to patent an invention or product is a lengthy procedure that takes around five years.
In addition, it is not usually possible to obtain a patent for software. Patents can only be granted for inventions which achieve a new ‘technical effect’ and computer programs on their own are not considered to do that.
The key here is the hardware. In a scenario where the software is run on a computer to process inputted data and return a result, that is not considered new or technical in nature. Therefore, although the software itself is new, it is not patentable.
The only situation where it would be possible to patent software would be where it could be demonstrated that this software allows the hardware to achieve a technically new result.
At the base level, it is strongly recommended to register a trade mark to protect your brand, the name of your product or service. Not only does it enable the use of the ® symbol to convey ownership and take legal action against any infringements but also it makes it easier to sell or licence in the future.
In the United Kingdom, a trade mark registration takes around four months, if there are no objections. A registered trade mark lasts ten years and is renewable.
A key point, is that registering a trade mark in the UK only protects your brand in the UK. If you want to use your trade mark other countries, applications need to be made to the trade mark office in each country.
Alternatively, there are European Union and International trade mark application systems. An International application must be based on an existing trade mark application, so the UK registration would be a pre-requisite.
To qualify for a trade mark, the brand must be unique and can be made up of a combination of words, logos, sounds and colours.
However, a trade mark cannot:
In addition, a trade mark cannot be granted if someone else has already registered an identical or similar trade mark for the same or similar goods or services.
If this is the case, you can request the holder of the existing trade mark for permission to register yours. If they agree, they would need to provide their letter of consent to be included with your application.
The UK is part of the Nice Classification, the latest version of which came into force on January 1st 2016 and consists of thirty-four classes of goods and eleven classes of services. Essentially, a trade mark is applied for under one or more of these classes.
To make the process less onerous, the Intellectual Property Office has introduced the Right Start programme whereby they will assess your application and report whether or not it meets the rules for registration. If not, there is a period of two months to resolve the issues.
If the Intellectual Property Office examiner has no objections, the application will be published in the trade marks journal for two months, during which time anyone can oppose it.
The trade mark will be registered once any objections, if any, are resolved and the Intellectual Property Office will issue a certificate to confirm the registration.
The fee for a trade mark registration in a single class under Right Start is £200.00, £100.00 of which is payable on application and the remainder if the application goes ahead after the examiner’s report. There is an addition £50.00 fee for each secondary class that is registered.
Whist the process has been designed to allow the owner of the brand to relatively simply apply for a trade mark, there are specialist trade mark lawyers and firms that can manage this.
If you have any questions or would like assistance in protecting your brand, please email us at tax@cooperfaure.co.uk for further information.