Changes to UK company law

The Economic Crime and Corporate Transparency Act gives Companies House the power to play a more significant role in tackling economic crime and supporting economic growth. Over time, the measures will lead to improved transparency and more accurate and trusted information on Companies House registers.

Under the Act, there will be new responsibilities for:

• all new and existing company directors;
• people with significant control of a company (PSCs); and
• anyone who files on behalf of a company

The new legislation generally applies to all entities registered with Companies House, including:

• private limited companies;
• public limited companies (PLCs);
• limited liability partnerships (LLPs);
• limited partnerships (LPs);
• community interest companies (CICs); and
• overseas companies.

The legislation applies to companies and other entities registered in England and Wales, Scotland, and Northern Ireland and applies to anyone who files on behalf of clients, such as accountants and company formation agents.

If you are planning on starting a new company or another entity type, you will need to consider the changes and new responsibilities introduced by the act. For existing directors and companies, it is important to understand how these changes will affect you.

Some of the changes include:

• Greater powers for Companies House to query information, stronger checks on company names, new rules for registered office addresses, and new lawful purpose statements;
• Identity verification - Anyone setting up, running, owning, or controlling a company in the UK will need to verify their identity;
• Transitioning towards filing accounts by software only, and changes to small company accounts filing options;  
• Increasing Companies House fees to take new future expenditure into account, as well as making sure costs are recovered from existing expenditure;
• Protecting personal information - Individuals will be able to apply to suppress personal information from historical documents and apply to have personal information protected from public view because of risk of harm;
• Changes for limited partnerships – these will need to file their information through authorised agents, and they will need to file more information with Companies House; and
• More effective investigation and enforcement powers for Companies House, and new powers to share data with law enforcement agencies and other government departments.

See: Changes at a glance - Changes to UK company law Companies House changes

The Unified R&D Tax Credit Scheme

The UK government has announced reforms to its Research and Development (R&D) tax credit system. This transformation seeks to combine the Research and Development Expenditure Credit (RDEC) and the SME relief into a singular scheme, effective from accounting periods beginning on or after 1 April 2024.

The new “merged approach” intends to streamline the system by introducing a single set of qualifying rules. The merging of these two schemes may raise concerns about the scheme's overall effectiveness compared to the older, higher-rate SME scheme. The new unified scheme's impact on fostering R&D investment and innovation, especially for smaller enterprises, remains to be fully identified.

The key changes in the UK's new unified R&D tax relief scheme include:

• The introduction of a single set of qualifying rules, rather than separate rules for SME and RDEC claims.
• The scheme allows companies making R&D decisions and bearing risks to claim relief for subcontracted R&D.
• Subsidised expenditure rules from the SME scheme will not be carried forward to the new scheme, meaning external funding won't reduce the available support.  Grant funded projects remain claimable, which is a welcome announcement.

The rate under the new scheme is set at the current RDEC rate of 20%. This credit will be subject to corporation tax.

See: Research & Development (R&D) tax relief reforms - GOV.UK (www.gov.uk)

Advisory fuel rate for company cars

The table below sets out the HMRC advisory fuel rates from 1 December 2023. These are the suggested reimbursement rates for employees' private mileage using their company car.

Where the employer does not pay for any fuel for the company car, these are the amounts that can be reimbursed in respect of business journeys without the amount being taxable on the employee.

Where there has been a change, the previous rate is shown in brackets.

You can also continue to use the previous rates for up to 1 month from the date the new rates apply.

Note that for hybrid cars you must use the petrol or diesel rate. For fully electric vehicles the rate is 9p (10p) per mile.

Please contact us if you need help in applying the new rates.

IP and Business Growth survey

The Intellectual Property Office (IPO) is inviting businesses to share their views on how intellectual property (IP) helps them scale and grow.

In a modern global economy, innovation, creativity, design, and brand recognition are increasingly important to business success. All these elements are underpinned by IP rights, such as copyright, trademarks, patents, and designs.

The IPO wants to support businesses to manage their IP rights effectively. It is conducting a review of UK's IP-backed finance ecosystem and IP insurance landscape. The new survey forms part of this review.

The survey covers a broad range of topics. Responses will help the IPO:

• better understand how businesses may raise external finance - including leveraging their IP assets to secure funding;
• explore awareness, perception and use of IP litigation insurance products among businesses; and
• better understand how to support businesses most effectively in managing their IP assets

The IPO wants to hear from businesses of all sizes, and from a wide range of sectors, which hold IP - whether an individual entrepreneur, start-up, established firm, or large corporate.

The survey closes on 2 February 2024.

See: IP and Business Growth Survey - Intellectual Property Office - Citizen Space

UK and South Korea launch talks on new trade deal

The UK and South Korea have entered talks on a modernised trade deal to boost trade and strengthen their relationship.

It comes as Korean businesses commit £21 billion of investment into the UK, backing renewable energy and infrastructure projects across the country and supporting more than 1,500 highly skilled jobs.

South Korea is the 13th largest economy in the world and its import demand is set to grow rapidly. With around 45 million middle class consumers and an import market expected to grow by 45% by 2035, it presents massive opportunities for UK companies.

The UK and South Korea are both major modern economies with big digital sectors and the current trade deal, negotiated more than a decade ago, doesn’t include digital chapters that reflect the modern economy.  

With nearly 80% of UK services exports to Korea delivered digitally in 2021, securing modern digital provisions could unlock big opportunities for UK businesses.

The UK’s trade with South Korea has more than doubled in current prices since our existing trade deal was agreed in 2011. An upgraded trade deal is expected to boost our £16 billion annual trading relationship with South Korea, supporting jobs and livelihoods up and down the UK.

See: UK and South Korea to launch talks on new trade deal as Korean businesses back Britain with £21 billion of investment  - GOV.UK (www.gov.uk)

UK government funding for jobs in AI sector

Up to £17 million in government funding will create more scholarships for AI and data science conversion courses, helping young people from groups underrepresented in the tech industry including women, black people, people with disabilities, and people from disadvantaged socioeconomic backgrounds join the UK’s world-leading Artificial Intelligence (AI) industry.

The government is encouraging companies to play their part in creating a future pipeline of AI talent by co-funding the AI scholarships for the conversion courses. Industry support for these scholarships will help get more people into the AI and data science job market quicker and strengthen UK businesses.

Together, government and industry funding will create two thousand scholarships for masters AI and data science conversion courses, each worth £10,000. The programme is enabling graduates to do further study courses in the field even if their undergraduate course is not directly related, creating a new generation of experts in data science and AI.

Courses are open to anyone who meets a participating university’s entry requirements. Details of how to apply are available on the universities’ websites. Eligible applicants can apply for a scholarship through their university. Please visit the Office for Student’s website for more information.

The UK is ranked third in the world for private venture capital investment into AI companies (2019 investment into the UK reached almost £2.5 billion) and is home to a third of Europe’s total AI companies.

The new scholarships will ensure more people can build careers in AI, create, and develop new and bigger businesses, and will improve the diversity of this growing and innovative sector.  

See: £17 million to boost skills and diversity in AI jobs - GOV.UK (www.gov.uk)