Before PSC was introduced, a UK company only needed to record immediate, legal owners of their shares and send these to Companies House. Since the 6th of April 2016, companies must now look at their entire ownership structure to identify relevant persons who have significant control of the company.
Broadly speaking, a PSC:
directly or indirectly owns more than 25% of the shares in a company
directly or indirectly holds more than 25% of the voting power of a company
has the right to appoint or remove the majority of directors of a company
can exercise significant influence over the company
Much of this information is on a public register at Companies House, so it's also available to HMRC and their Wealth Team is now sending multiple letters to individuals on the PSC register.
Firstly, one is directed at individuals on the PSC register who have submitted a 2020/21 tax return with income less than £100,000. Secondly, the other one is being sent to PSCs who are not yet submitting self-assessment tax returns.
"These letters ask the taxpayer if they've considered whether they have anything undeclared!"
And this includes benefits received from the company, such as share options or income created from the disposal of shares. If HMRC identifies any gains or additional sources of income, taxpayers will be asked to amend their 2020/21 and 2021/22 tax returns.
Letters were sent in late October 2022, so be sure to take a look for any brown envelopes in your correspondence, and make sure you speak to your accountant and get it dealt with before any penalties are applied.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
If anything I've written in this blog post resonates with you and you've received one of these letters from HMRC, it may be a great idea to call me on 01908 774320 and let's see how I can help you.
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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