Typical: we’ve just about got to grips with the new PSC regime introduced last April when the Government announces significant changes!
The current regime
The PSC regime was introduced in order to increase transparency over who owns and controls companies in the UK. It was hoped that this transparency would help to reduce tax evasion and the criminal misuse of companies for activities such as money laundering.
Most UK companies and LLPs now have to maintain a register of the people with significant control over them (their PSCs) and file that information at Companies House. Our previous blog, Five simple steps to the new PSC register, explains the regime including who will qualify as a company’s PSCs.
The current regime applies to all UK companies except those that are subject to rule 5 of the Disclosure Guidance and Transparency Rules (companies on the UK’s Main Market and AIM) and those that are listed on a regulated market in another European Economic Area (EEA) state or on a market in Israel, Japan, Switzerland or the USA. Partnerships and limited partnerships, including those in Scotland, are also currently excluded.
However, the PSC regime is due to change on 26 June 2017 when the provisions of the EU’s Fourth Money Laundering Directive are implemented into UK law. Despite the UK’s current PSC regulations satisfying most of the Directive’s requirements, amendments are still required to ensure full compliance.
Who will be subject to the new regime?
Currently, DTR5 companies are excluded from the PSC regime as they are already subject to an existing framework of disclosure and transparency obligations. This will change at the end of June when only companies listed on a regulated market in the UK (that is the Main Market) will be exempt. It appears that AIM companies will have to contend with the dual burden of complying with the PSC regime as well as the significant shareholder reporting obligations contained in the AIM Rules and DTR5.
Previously exempt Scottish bodies will also be affected. Unlike their English equivalents, both Scottish limited partnerships and Scottish general partnerships have separate legal personality. From 24 July 2017 they will become subject to the PSC regime and will have to register details of the people with significant control over them.
Companies House changes
Companies will also see differences as to how and when changes to the PSC Register must be filed with Companies House.
At present, all companies are required to ‘check and confirm’ their filed information, including their PSC information, once a year via an ‘annual confirmation statement’. A company is not required to notify Companies House upon every change to the PSC Register and, instead, these changes are simply contained in the next filed confirmation statement.
The changes to the PSC regime mean that a company will no longer use the annual filing of the confirmation statement to inform Companies House of changes to its PSC Register. Instead, any changes must be reported within 28 days of them becoming apparent. This gives the company 14 days to update its register and a further 14 days to file the relevant forms.
The annual confirmation statement will continue to include PSC information and companies will have to confirm in that statement that the PSC information is correct.
This blog post was written by Sophie Brookes. For further information, please contact:
Sophie Brookes, partner, Corporate
T: 0161 836 7823