Government review of PSC regime
The Government has published a review of the PSC regime which requires UK companies to record and publish information about the people with significant control over them.
Overall, the review found that businesses were engaged with the regime, with 92% of the 500 businesses surveyed having registered PSCs. 'Most had submitted information to the register around the time the register was introduced and the majority of businesses that had experienced a change in their PSCs had reported this to Companies House', the review said.
The burden and benefits of the PSC regime
The PSC regime requires UK companies, limited liability partnerships and certain Scottish partnerships to investigate their PSCs, gather information about those PSCs, record that information in their own internal PSC register and file that information at Companies House. Even if a company has no PSCs it must still keep a register confirming that position and must tell Companies House. There is an on-going obligation to continue investigations and ensure the filed information remains up to date.
Despite these requirements, the review found that the financial impact of the regime has not been significant. The mean overall cost for complying with the regime was £287, although this varied according to the size and complexity of an entity's ownership structure.
Interestingly, almost a quarter of the businesses surveyed had used the regime to look up information about another company, such as a customer, supplier or competitor, suggesting businesses are seeing the regime as a beneficial tool not just a regulatory burden. Almost one in five businesses used the register as part of their verification or due diligence checks.
Concerns about the accuracy of registered data
Stakeholder organisations, law enforcement organisations and financial institutions consulted as part of the review also generally viewed the PSC register as useful for their work. However, they had concerns about the accuracy of the data in the register which meant they did not have enough confidence in the quality of the information to consider it a reliable source.
A recent newspaper article highlighted the fact that no one checks the accuracy of information filed at Companies House. Responses to the Government review suggested that in order to improve the quality of the information held on the PSC register, Companies House should introduce both validation checks (checking information at the point it is submitted) and verification processes (verifying the accuracy of the information submitted).
Make sure you comply
Failing to comply with the different steps of the regime is a criminal offence for the company and each officer in default.
PSCs are also required to respond to requests for information from an entity investigating its PSCs and to notify it of any changes to registered information. A PSC that fails to comply with the regime can also have their interest in a company 'restricted' meaning they are unable to exercise any rights, or derive any benefits from, that interest. Jeremy Hunt was an early casualty of the regime when he failed to declare his interest in a property development company.
Find out more about what the PSC regime means for your company by downloading our guide:
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