Welcome to the July 2009 Newsletter from Connolly Accountants & Business Advisors

The Government has brought forward its review of the default retirement age by a year, prompting speculation that the default could be scrapped.

Business groups have given mixed reactions to the news, with some expressing concerns that abolishing the default will pose particular difficulties for smaller businesses.

Meanwhile, the final stages of the Companies Act 2006 will come into force on 1 October. The Act includes measures designed to modernise and simplify company law and reduce the regulatory burden.

See below for more information on the Companies Act.

Compulsory retirement at 65 'could be scrapped'

While most people in the UK retire by the age of 65, 1.3 million continue working beyond that point.

The Government has announced that it has brought forward its review of the default retirement age from 2011 to 2010, as a result of changing demographic and economic circumstances.

Many see the announcement as an indication that the default retirement age of 65 will be scrapped.

The Confederation of British Industry (CBI) has described the decision as 'disappointing', arguing that 81% of employers already accept employee requests to continue working beyond the age of 65, and that having a default allows both staff and businesses to plan ahead.

Katja Hall, Director of HR Policy at the CBI, said, 'Some people can happily work in their existing job beyond the age of 65, but this is not possible for all occupations, and companies with smaller numbers of staff have particular problems adapting jobs to the needs of older workers'.

However, the Trades Union Congress (TUC) has welcomed the news. TUC General Secretary Brendan Barber commented, 'It cannot be right that an employer can sack someone simply for being too old. A key challenge as we live and stay active longer is developing the right kind of jobs, support and training for older workers'.

The Companies Act: the final implementation

The Companies Act 2006 received Royal Assent on 8 November 2006, and has been introduced in a series of different stages. Some of the key changes coming into force on 1 October 2009 are outlined below.

New company formation

The documentation required for forming a company will be very different, with a much shorter Memorandum of Association. Companies will no longer be required to specify their objects, and the concept of authorised share capital will be abolished.

New Model Articles will be introduced. There will be three types:

  • Private company limited by shares
  • Private company limited by guarantee
  • Public limited company

The Statement of Capital is a new requirement, providing a 'snapshot' of a limited company’s issued share capital at a given time. It will also need to be provided in various other circumstances, including as part of the application to incorporate and with each annual return made up on or after 1 October 2009.

Existing companies

Companies formed before 1 October 2009 will have constitutions designed under previous law, so there will be a need for transitional provisions. Where the Articles contain matters which are not required under the specific provisions of the Companies Act 2006, the company may consider them to be unduly restrictive.

Companies would be well advised to examine their Memorandum and Articles of Association with a view to adopting the new Model Articles, or to changing some of their current provisions.

Directors' Service Addresses

Directors (and company secretaries where applicable) of both existing and new companies will have the right to set out a service address rather than their usual residential address. The service address may be the company’s registered office.

Individual companies will have to maintain two registers of directors – one containing, amongst other things, a service address for each director, and a further register containing the residential address of each director (protected information).

Only shareholders of traded public companies will be required to provide any address to Companies House.

Registrar's Powers

The Registrar of companies will be given a range of new powers. These include powers to decide on the form and manner in which companies must deliver documents, what is needed for a document to be properly delivered, provision of electronic delivery for certain documents, and amendments to the register.

Striking off

The existing procedures will be carried over in a similar form. However, there will be a new simplified administrative restoration procedure for companies struck off by Registrar’s action. Whatever the route of dissolution, the time limit for application to restore will be six years (currently two years for liquidation, 20 years for striking off).

For further information on the Act, please visit our Hot Topics section.


2 August: Quarterly submission date of P46 (Car) for quarter to 5 July.

31 August: Annual adjustment for VAT partial exemption calculations (May VAT year end).

For more information on key tax dates and deadlines, visit our 2009/10 Tax Calendar.


'If UK companies are to compete successfully with the best of the rest of the world, there is no alternative other than for them to become the best in the new low carbon technologies'.

TUC General Secretary, Brendan Barber, on Government plans to move the UK towards a low carbon economy


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