UK Annual Return Requirements and Tips For Payroll Owners

UK Annual Return Requirements and Tips

The United Kingdom has tried to simplify some of the payroll processes its citizens face each year. For example, the Pay As You Earn (PAYE) initiative deducts earnings as you work, and in turn, a majority of people in the UK don’t have to file an annual tax return. Reporting happens automatically, too.  Plus, the government implemented a Real Time Information system that electronically transmits tax information as soon as payroll is approved. UK officials have also improved the UK annual return forms to make them a little easier on businesses.

UK Annual Return Is Now a Confirmation Statement

Small Business Enterprise and Employment Act 2015 changed the annual reporting requirements for a UK limited company. Prior to the law, every UK limited company had to file an annual return as a snapshot of the company’s information so the Companies House could ensure that their records are up-to-date.

The Confirmation Statement leaves the process basically intact, but they make it simpler for companies that don’t change their information every year. Rather than fill out a completely new report, the Confirmation Statement allows these businesses to indicate that there are no changes, which helps to streamline the process.

Information Required In the Confirmation Statement

The information that the Confirmation Statement requires is the same as the Annual Return except for one significant difference. Here are the pieces of information that remain basically the same:

• Registered office address

• Trade classification codes

• Company secretary details (if applicable)

• List of shareholders and their share ownership

• Share capital

• Share transfers in the confirmation period

• The location of any Single Alternative Inspection Location (SAIL)

• Where each statutory register is kept (if the company uses a SAIL)

• Whether any of the company’s shares are admitted to a public trading market

When you file your Confirmation Statement, you may simply indicate that there are no changes. If there are updates needed, reporting parties must simply report which piece of information has changed. This new process will make creating these reports much easier.

Persons of Significant Control Information

Not every process has been simplified, however. The new law requires that limited liability partnerships (LLPs), community interest companies (CICs), public limited companies, and unlimited companies must all create and maintain a PSC register and create a register for Persons of Significant Control. Lawmakers hope to use this law to increase business transparency. There are three criteria that most small businesses will use to define someone as a Person of Significant Control:

• The person owns more than 25% of the stock of the company

• The person holds more than 25% of the voting rights

• Anyone who has the power to appoint or remove the majority of the board

If someone matches even one of these criteria, he or she should be added to the PSC register.

PSC Register Requirements

Here is the information that the law requires a business to have in its PSC register:

• Name

• Date of birth

• Nationality

• Country of residence

• Service address

• Residence address

• The date on which the individual is registrable

• The nature of their control over the company

It is not enough to simply report the information for each PSC, even if you have all applicable data at hand. The law requires that each PSC confirm their details by sending them a formal notice or form 790D. This piece is not optional, even for the PSCs. It is an offense if they do not reply to confirm their details. When reporting the nature of their control over the company, the law recognizes three separate “bands” of ownership. Each entry in the register should indicate into which band the person falls:

• More than 25 percent of the company, but less than 50 percent

• More than 50 percent but less than 75%

• More than 75%

Tips for UK Annual Return Success

To ensure a smooth process for UK payroll at year end, keep track of your confirmation date, which is the date after which you need to file your Confirmation Statement. While the Companies House will contact you to remind you of your obligation to return the form, it’s a good idea to prepare your statement before the reminder comes – especially if you are creating a new PSC register or your information has changed significantly.

Don’t wait for the next Confirmation Statement to update your PSC. When the company adds new PSCs or someone no longer is one, change the register. If you believe that a new person is a PSC, you have to contact them to confirm their details and that the person is truly a PSC before you can enter them on the register.

While you can file on paper, the easiest way to file your Confirmation Statement is online. Go to this website to begin the process.


Celergo has represented clients in many countries for many years, including the UK. We’ve built the local expertise needed to take care of your payroll-related compliance and tax requirements around the world – on time and accurately, especially at payroll year end when your team is managing a number of additional deadlines. To learn more about our services, contact our team today!



**This article is for informational purposes only. It is not intended to constitute legal advice.


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