Small and medium-sized businesses (‘SMEs’) have been confronted with many challenges over the course of the COVID-19 pandemic. A recent annual report by the British Business Bank found that 43% of the UK’s SMEs received external financing in 2020 (compared to just 13% in 2019). More than 1.4 million small companies have borrowed almost £46 billion under the government’s bounce back loan scheme. In addition, the number of SMEs in the UK accessing government grants rose to 31% in 2020.
However, the road to recovery appears to be in sight. New government regulations were introduced from 19 July 2021 that revoked a series of restrictions imposed on businesses during the COVID-19 pandemic. This final step of easing restrictions has been welcomed by SMEs in the UK that have been adversely affected over the last year, in particular, those operating in the tourist and hospitality sectors.
As businesses across the UK make steps to recover from the economic strain caused by the pandemic, certain legal procedures have also been adjusted accordingly over the last year and have become more efficient as a result. A good example of this can be seen in ‘stamping’ procedures.
‘Stamp duty’ refers to a tax charged on instruments transferring ‘stock’ and other securities, including the transfer of company shares. Transfers of shares require official registration to perfect the transfer of legal ownership of the shares from the seller to the purchaser. It is an offence to register the purchaser as the legal owner of the shares if the relevant stock transfer form has not been duly stamped.
In March 2020, HMRC introduced ‘temporary’ measures that included waiving the requirement for stock transfer forms to be physically stamped. Instead, HMRC’s confirmation of receipt of stamp duty by email has been sufficient to consider the stock transfer form as having been duly stamped.
Updated guidance by HMRC this year has made it clear that these ‘temporary’ measures will now be permanent. As of this year, a stock transfer form will be considered duly stamped once HMRC confirm receipt of stamp duty by return letter. The new procedures will reduce the administrative burden of physically stamping stock transfer forms, making the share transfer more efficient for all involved as a result.
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