The UK Department for Business Innovation and Skills issued a consultation recently concerning the "Red Tape Challenge" which is a UK Government initiative which considers all regulations and seeks views on whether any can be scrapped or improved in some way.
One of the proposals concerned the Annual Return which is considered to be burdensome on the grounds that it often requires duplicate information to be entered or confirmed. It must be completed even if a company has made no changes, and it takes time and incurs costs to complete and is not required by EU law. In this consultation from October 2013, the following proposals were made:
- Remove the requirement to complete an annual return but require each company to confirm, at least annually, that the information held on the register about it is correct;
- Remove the requirement to complete an annual return and rely on event driven filing; or
- Retain the annual return.
The UK Government's response to the consultation was published recently and the executive summary states the following:
"Annual filings: the Government has decided to allow companies more flexibility to confirm whether their company information is correct and complete at any point in a year. This is instead of requiring companies to complete an annual return at a set point of the year. This will remove a burden from those companies who make changes to some of their information within the year and then have to duplicate this information when they additionally complete an annual return.
Companies that make changes inside a twelve month period (for example, if they appoint a new director) will be asked if they wish to check and confirm other information at the same time. If they do so, no further action will be required for a further twelve month period (unless there is a change which needs to be notified to the registrar)."
The Annual Return is not the sole target for change, with proposals in the areas of accounts, dates of birth, statements of capital and registered office addresses amongst other areas.
The next step is for the Government to propose amendments to the Companies Act 2006.