Bruce Wallace Associates London
Bruce Wallace Associates London

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August 2020

11 August, 2020

Q. The filing deadline date for our subsidiary companies’ accounts is fast approaching and we are struggling to get these finalised, do we need to apply for an extension of time?

A. The Companies etc (Filing Requirements) (Temporary Modifications) Regulations 2020 (2020 Regulations) came into force on 27 June 2020. With effect from this date, filing deadlines are extended if the filing date deadline falls any time from 27 June 2020 to 5 April 2021 (including these dates). Regulation 11 of the 2020 Regulations amends CA 2006, s 442 relating to companies and Regulation 12 amends CA 2006, s 442 relating to LLPs.

The 2020 Regulations extend the filing deadline by three months, to 12 months for private companies and nine months for public companies. The extension granted by the 2020 Regulations applies to the original filing deadline. It will not be added to a filing extension already granted by Companies House.

These are temporary measures and filing deadlines falling after 6 April 2021 or later will not be automatically extended.

The 2020 Regulations also temporarily extend filing periods for confirmation statements, event-driven filing obligations and mortgage charges. Guidance can be found on the Companies House website https://www.gov.uk/government/publications/the-com....

You can find the 2020 Regulations at https://www.legislation.gov.uk/uksi/2020/645/conte....

If you need any help filing your accounts or with any company secretarial matters generally, please contact us. All our contact details are on our website www.brucewallace.co.uk.

July 2020

15 July, 2020

The Wates Principles

Q. We are a large private company and we understand we are required to report against the Wates Principles in our next set of accounts. Can you summarise when these governance principles were introduced and the main issues we need to address?

A. The Wates Principles were published on 10 December 2018, as part of a wider package of Government corporate governance reforms.

The legal requirements, as set out in The Companies (Miscellaneous Reporting) Regulations 2018 (SI 2018/860) (the ‘CMRR 2018’), state that large private companies are required to report on their corporate governance arrangements in the annual report and on their website and to outline which, if any, formal corporate governance codes the company has applied and how it has been applied.

The reporting requirement, that came into effect for accounting periods commencing on or after 1 January 2019, applies to all private companies that satisfy either or both of the following conditions:

  • those companies with more than 2,000 employees; and
  • a turnover of more than £200 million and a balance sheet of more than £2 billion.

The Wates Principles introduce an approach to good corporate governance that provides flexibility and assistance for the large, private, unlisted companies which are subject to the thresholds set out under CMRR 2018 and aim to suit private companies better than the codes used by listed companies, such as the UK Corporate Governance Code or the QCA Corporate Governance Code.

The Wates Principles is a voluntary framework that adopts the ‘apply and explain’ approach. If a company chooses to apply these, they should describe and explain how they have addressed each of the six high level principles in the company’s governance practices. This is in effect to allow for increased transparency for stakeholders and links to how the directors have discharged their section 172 duty.

The principles include:

  • Purpose and Leadership
  • Board Composition
  • Director Responsibilities
  • Opportunity and Risk
  • Remuneration
  • Stakeholder Relationships
  • Engagement

If you need any help with your governance statement or with any of your governance policies generally, please contact us. All our contact details are on our website www.brucewallace.co.uk.


June 2020

8 June, 2020

Share Option Annual Returns

Q. We have had no option exercises this year. Do I still need to file a return? When is the deadline and can I file the return myself or do I need special software to do this?

A. If you are an employer operating employment related securities (ERS) schemes, you (or an agent acting on your behalf) must submit an ERS return every year for each of your schemes, including one-off awards or gifts of shares.

The tax year runs from 6 April to 5 April the following year. You then have until midnight on 6 July to submit your annual return. If you do not, you or your employees may lose any tax advantages from the scheme.

You need to submit an ERS return (or nil return) even if:

  • there have been no transactions
  • you have appealed a late filing penalty
  • the scheme has been registered in error or there is a duplicate scheme
  • you did not get a reminder from HMRC

If you have nothing to report, you must submit a nil return by going to https://www.gov.uk/employment-related-securities-files; no special software is required.

You will need the Government Gateway user ID and password you used when you told HMRC about the scheme.Employers, or agents acting on their behalf, can use this service to:

  • check files for formatting errors
  • submit annual ERS returns and/or nil returns after the tax year end

Usually when submitting your return, you will be required to complete and upload the relevant template to notify HMRC of any movements in your scheme during the tax year. If you are submitting a nil return only, no file attachments are required; you simply need to follow the on-screen instructions and enter some basic company information to submit your nil return.

If you have any questions regarding share options or you need help submitting your returns please contact any of the team at Bruce Wallace – you will find all our contact details on our website www.brucewallace.co.uk


April 2020

16 April, 2020

Covid-19 – Companies House and HMRC Stamp Office

This update contains a summary of the services that have been revised or temporarily modified by the Government as a result of the implementation of the Stay at Home measures due to the Covid-19 pandemic.New provisions are continually being introduced. Please check the relevant authority for the current status.

Filing documents at Companies House

Most documents and forms can be filed online using Companies House existing online services such as WebFiling. For those documents and forms that cannot currently be filed online, Companies House is working to enable customers to upload all documents and make payment when necessary.

Public access and delivery of documents to Companies House

There are a number of restrictions to public access in all offices and to the delivery of paper documents. There are also delays in processing paper forms.

The Belfast, Edinburgh and London offices are currently all closed to the public. Paper documents can be delivered to the Belfast and Edinburgh offices, but no receipts or proof of delivery will be sent out.

There are no letterbox facilities at the London office. All mail must be sent directly to the Cardiff office: Companies House, Crown Way, Cardiff CF14 3UZ.

The telephone contact centre is closed. All enquiries should be emailed to enquiries@companieshouse.gov.uk.

Same day services

Same day incorporation and re-registration services have been suspended until further notice.

Filing accounts online

Certain types of accounts can now be filed online. This can be done using the Company authentication code sent out by Companies House. Alternatively, full or abridged accounts can be filed using the CH- HMRC joint filing service or using third party software. Details of the software providers can be found on the Companies House website.

Accounts that can be filed online include - micro entity accounts, abridged accounts, full accounts and

dormant accounts. Accounts for charities or public limited companies cannot be filed online.

Late filing of accounts

If a company is affected by COVID-19 and therefore unable to file its statutory accounts by the filing deadline, provided the filing deadline has not been passed a company can apply for an automatic and immediate three-month extension to file its accounts. To apply for an extension online a company number must be provided, together with information about why more time is needed and any other supporting documents (optional). A late filing penalty will not be issued if the application is approved and the accounts are filed before the extended deadline.

If accounts are filed late, an automatic penalty will be imposed. The penalty can be paid by BACS (www.gov.uk/government/publications/late-filing-penalties#paying-your-penalty).

Submission of certain forms

SR01 Form - (Application under S1088 by an individual to make an address unavailable for public inspection). The quickest way to ensure this application is processed is to send the SR01 Form by email to Companies House. The original completed SR01 Form and a cheque(£55 per document listed) should also be sent by post Companies House.

Applications for protection – (Sections 243, 790ZF and 790ZG of the Companies Act 2006) - Paper applications to restrict the disclosure of personal information have been suspended. Applications should be made online to protect details from being disclosed on the Companies House public register.

SH03 Form – (Return for the purchase of shares). Companies House is accepting unstamped SH03 Forms online if accompanied by a letter from HMRC confirming the email application process has been used.

Court orders - Companies House continues to accept and register court orders sanctioning schemes of arrangement which are accompanied by a letter from HMRC confirming that the correct duty has been paid or confirming that no duties are payable.

Transfer of shares – payment of stamp duty

The HMRC Stamp Office is currently closed. Stock transfer forms can be emailed, and payments made online to (Sort code 08 32 10, Account number 12001098, Account name; HMRC Birmingham Stamp Office). A reference should be provided when making payment - your name followed by the payment amount e.g.: JBrown/240. After payment of stamp duty has been sent to HMRC the following details must be emailed to stampdutymailbox@hmrc.gov.uk

The email should include the payment reference, amount and date of payment together with a pdf copy of either the signed and dated stock transfer form, the instrument of transfer or form SH03 (Return of purchase of shares).

HMRC will accept e-signatures while COVID-19 measures are in place. If the stock transfer form or instrument of transfer do not include certain details these should be added to the email. These include - the name of the company whose shares are being transferred, the shares being transferred including the date of transfer, the parties to the transaction and the amount of consideration.

HMRC will send out a confirmation letter by email. They will also email if they have any queries relating to the transaction.

The current time limit for paying stamp duty is 30 days after the execution of the document to be stamped. This remains the time limit under the electronic arrangements. For faster payments or CHAPS, you should allow one day for the payment to reach HMRC. For BACS payments, HMRC recommends allowing three working days. If the expiry of the 30-day deadline falls on a weekend or bank holiday, the payment must have reached HMRC on the last working day before the deadline to avoid penalties and interest accruing.

The Companies House website is: www.gov.uk/goverment/organisations/companies-house.

For more information or if you require our assistance with any of the above matters please email us at info@brucewallace.co.uk

March 2020

12 March, 2020

A large number of remuneration committees and boards of listed companies will be reviewing and updating the directors’ remuneration policy for shareholder approval at this year’s AGM.

Here is a summary of the recently issued voting policy guidelines for 2020 from the proxy voting advisory services, Glass Lewis and Institutional Shareholder Services (‘ISS’), as well as the key changes to the Investment Association’s (‘IA’) Principles of Remuneration for 2020. The points noted below relate primarily to remuneration and pension matters, however there are some broader points around diversity, independence, chair tenure that are not included here.

Institutional Shareholder Services

ISS updated guidelines will be effective for meetings from 1 February 2020.The main remuneration changes to the 2019 ISS Guidelines are:

  • Annual bonus targets – Detailed targets for financial and non-financial objectives should be disclosed preferably with a full target range (e.g. threshold, target and maximum) set out.ISS expects disclosure of sensitive targets to be provided no more than one year after the end of the relevant performance year immediately following the reporting year.
  • Remuneration and ESG factors – The remuneration committee should disclose how it as taken into account any relevant environmental, social and governance (ESG) matters when determining remuneration outcomes.This may include workplace fatalities and injuries, significant environmental incidents, large fines or sanctions from regulatory bodies and/or significant adverse legal judgements or settlements.
  • Pension contribution rates – Rates for new executive directors should be aligned with those of the wider workforce, and companies should disclose whether or not this is the case.For incumbent directors, companies should seek to align the contribution rates with the workforce over time.

The Investment Association

The IA published its revised guidelines on 1 November 2019, the key changes for which include:

  • Alternative remuneration structures – The IA has indicated that there are concerns over the operation of traditional long term incentive plans and that committees should review remuneration structures pointing out that a report by the Purposeful Company has shown investors are more willing to consider other structures such as restricted stock plans as long as these are linked to strategic outcomes.
  • Discretion on vesting outcomes – The 2020 Principles contain a recommendation that incentive schemes have a discretion for remuneration committees to limit vesting outcomes if a specified monetary value is exceeded.
  • Pensions – Pension contribution rates for executive directors should be aligned with the majority of the workforce and a plan should be in place to reduce contribution of existing directors to this level by the end of 2022.
  • Shareholding and post-employment shareholding requirements – Post employment shareholding requirements should be introduced in all new remuneration policies put to shareholders.
  • Remuneration levels – The IA continues to be concerned about excessive levels of remuneration for directors and remuneration committees are urged to use constraint when increasing fixed and variable pay.
  • Pay for performance – Reporting on financial, strategic and personal targets for performance pay should be robust and transparent so that the link between pay and performance is clear.Strategic and personal targets and outcomes should be disclosed separately.

Glass Lewis

The key changes for the 2020 voting season are:

  • Salaries and pensions – Salary increases, and pension contribution levels should reflect those awarded to the wider workforce.
  • Incentive plans – Awards for incentive plans should be subject to clear and transparent limits ideally expressed as a multiple of base salary.
  • Post-employment shareholding requirements – These are expected as best practice features of remuneration policies
  • Remuneration Committee discretion – Remuneration committees should consider using downward discretion where there has been an exceptional negative event (including a sharp decline in share price) even if targets have been met.

GL will also review compliance with the Investment Association’s Principles of Remuneration when considering voting recommendations.

If you need more information please contact us at info@brucewallace.co.uk

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Martha Bruce

martha@brucewallace.co.uk

Susan Wallace

susan@brucewallace.co.uk

Chloe Higgins

chloe@brucewallace.co.uk

Adrienne Graham

Adrienne@brucewallace.co.uk

Anne-Marie Palmer

anne-marie@brucewallace.co.uk

Registered office:
118 Pall Mall
London
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