I'm going all in on The Voice Note style to this podcast, and I have stripped away using Garage Band and my laptop and a plug in microphone to record it. I actually did just record this episode with a clip on microphone and a couple of minutes in, it seemed to stop working, because I went back to check the recording, and after a few minutes, it was silent. So I'm going fully authentic. I am talking into my phone just like I am voice noting you. So essentially I'm voice noting you right now. And what I wanted to talk to you about today is, wow, I had something in mind I was going to talk to you at length about, and then something changed at the last minute, and that's no longer going to be relevant.
And what that is, rather than just being cryptic, and it's not very exciting for how cryptic I've just made that sound is basically the government, particularly Companies House, have just reversed some quite controversial changes.
So I was going to talk through the controversial changes and how we might prepare for that, because there was a recent announcement, we knew it was in the legislation, but there was no date to it that, and the recent announcement was putting a date to it that small companies would be required to file a full profit and loss account publicly. And obviously that's been quite controversial for a number of reasons, and there's been lobbying, and I think it was Thursday or Friday. I can't remember exactly which day it was, though, this week it's been reversed due to lobbying.
So basically, that's not happening now. There's nothing of a certain size over a certain size. You are required to file your full kind of sales, costs, profits, etc, or in the public domain. But the controversial part was putting that requirement onto lots and lots of very small companies. And when I say very small, I mean small, small, relative small. The definition of small is quite big, basically, for Companies House, but a lot it would be, I don't know the statistics. It's going to be 1000s and 1000s of companies that would have been affected by this.
And well, that would mean, so I'm not going to go into that now, because it's not actually happening. The other part to it that's not actually happening is sort of dogs eating something. The other part where that's not actually happening is there was going to be a requirement around software and requiring companies to only be able to file directly from third party software to Companies House. That's not happening now either. That's part of the thing that's been scrapped very briefly.
I think software is really helpful. It's amazingly simple and streamlined. If we use software, it's accurate, etc, to be able to file like that, but I do very much support the choice to not be pushed down that route. And essentially, yeah, that's not happening. But I'm still going to be talking about Companies House and companies today, but with a slightly different angle. So the thing I found, always found, not always, because obviously, there was a time when I didn't know about companies, probably it wasn't that aware. Can't remember when that was, because it's been in this game for a while now. But something since I've been in the world of limited companies registered at Companies House, I've always been quite interested in the way that come a limited company is telling a story.
And if we go to right back to, like, how big of a story, this is the whole thing of a limited company is a story. It's like a collective decision to recognise something that isn't real as real. So a company we have decided is like a separate legal entity. It's a real thing. It's like a real person, but it's also not real and is attached to a series of like rules, regulations, all the things that make it seem real, but it's actually not real. So if, if I have got lots of dogs around me sleeping at the moment on rummaging and things they shouldn't be like if I talk to my dog, I mean, my dogs have been exposed to limited companies and accounting and finance, so, you know, maybe they, maybe they've picked up some of this.
But animals for what I'm getting is animals would not know what company was, because you can't point at it. Go, that's the company. So a company is a collective thing that we've make, believed into existence, and obviously we've got all these rules and regulations around it, so it seems really real, but essentially it's a fiction, a collective fiction, and there is a story. Even like with just a company, there's a story. And this is what I find fascinating, is when you incorporate a business that's like, it's been birthed, and I always think, I wonder what will happen now, what's going to happen next? Because, yeah, some companies, you know, nothing much changes. They come and they go, whatever.
But some companies is going to be different. Name Changes. There's gonna be different ownership structures. It's gonna be different names coming on and off the register. And it always just fascinates me, because once it starts, it's like, there's gonna be things that happen, and there's gonna be a story told. It even records, like deaths, basically. So it is very kind of like, you know, whole life cycle there. The whole life cycle of every single company is going to be registered and tracked through that, yeah, the company's house register, which you can obviously access online. Anyone can access that online and have a look.
So talking of having a look, and you know, there's lots of good reasons to have a look and snoop about on Companies House. I mean, particularly like things like suppliers. It's always a good idea to check there's no sort of red flags at Companies House, for example, that they're not being struck off. You can obviously look at their financial records as well, potentially, but there's a few good things to check, like they're up to date with their filings. I mean, life happens, but generally it's not great indicator of things a bit behind potentially that you'll be thinking, okay, maybe I need to be careful with this supplier, for example, or customer, whatever you know, due diligence, essentially. So there's, there's reasons to be looking about on there, but one reason is actually some, some interesting history. So I was just thinking about this company's house reform, and company's house has been around for quite a while, and I was interested in, what is the oldest company? You know, given that you can look at this whole story of a company, what's the oldest company that is on the register is still going basically, what's the oldest one? And it's is, is called Ashford Cattle Market Company Limited. That's the longest running company that's still in operation now that has been incorporated, or is incorporated in 1856 so pretty long time ago. And when I looked up that the name, there was a little blog about it, or something about the longer the oldest companies. I looked them up on the register.
So if you go to the like.gov.uk website and search the company's house register, you can look up any company. I could see the original Memorandum of association document. So there's, literally, it's hundreds of pages, this beautifully handwritten document with beautiful swirly writing. And what's really curious is, even though that's a long I can't do the math in my head, but that's quite an old company, 1856, the things that are in there are things that we're still having, memorandums of association today. It's all the rules and regulations. And as I haven't read the whole thing, but it's all about votes. And when you can do this, when you can do that, it's all still there. So it's like so much has changed, but so much has not changed as well.
And this, yeah, this. So this, given you might guess from the name the custom market part is it was founded by a group of farmers and 10 pound shares, very, gonna be very expensive if you think this was an 1856 Yeah. So it's just interesting that. And when I was look, when I searched the name I was, it was kind of like, oh, you know, is this one you're looking at, or is it these are the ones that are similar. And actually, cat, there was a lot of cattle market ones, which were quite old as well. Some the, you know, had an 18 in the start of them. Some were 19, the early 19, you know, 20th century. And it just thought was really interesting that they're still going now. Some of them because, yeah, because you can see the full history. I mean, they haven't got all the sets of accounts from from them, because, I guess they weren't. Did you know there was only so much digitalization that went on? But I was fascinated. The original Memorandum of association is showing on there. And, yeah, so I was curious then as well. I. When did this whole thing start? And
it was the 1844 joint stock companies act. So before that day, a company could only be incorporated through the grant of royal charter or by private Act of Parliament. So this was very inaccessible, clearly, because that's a, you know, an exception, isn't it? And then after this date, and obviously, there wasn't loads of companies for a number of years. But yeah, the Joint Stock Act Companies Act 1844 was born out of the idea. Let me just find the thing I was reading. I um, it was to do with transparency. So it was hoped of the MPs of the day that publicly accessible central company register would protect the public from fraud. So that's what it was about. Was about transparency. It was about seeing what's going on and having certain things that were publicly available to kind of, yeah, create that transparency, which is interesting, because the reforms that are going on right now and the you know we're in 2025 all about fraud. It's just, it's just slightly, probably, in many ways, similar fraud, but slightly different fraud, because we are talking about, you know, various things to do with money laundering and fake directors and shell companies and bits and pieces. So a lot of the legislation changes at the moment are to do with ID verification, which is probably a good thing, right? Because it's making sure that the directors are held to account as real people, which I think is a good thing, probably.
And, yeah, there's also elements of, you know, enhanced powers to challenge stuff from Companies House, which, you know, I'm a bit more dubious about, just because I think, you know, when we've seen like with the post office having private, you know, with having enhanced sort of powers as a organisation, it's just making sure that things are being done. Yeah, above board, I guess, because we've seen like with the post office scandal, that that isn't always that. You know, giving private prosecution powers isn't always a good thing, but that's something we will, I guess we will discover as we go, how that looks in practice.
The thing is, yes, there's lots of, obviously, lots of dodgy people targeting the company's register, but everybody I work with is obviously a lovely, honest person doing the right thing, probably over worrying about what they're doing. And, you know, we're not committing fraud, yeah, but I think that, you know, I was just kind of interested, basically, because so much has changed, and yet so much is still the same in terms of, like, we're still trying to do things to prevent fraud, apparently, lots of other things going on in the world that are also very important over and above fraud, but it's still, it's just interesting that there's still the same stuff going on is And how much is similar about companies. But also it is a story, is a collective imagination that we've come up with companies, and this is only a few 100 years. So even though it's impressive that it's hundreds of years old and it's still around, it's also kind of indicative or we could change it. We could, you know, we could change things if we wanted to, because it's only a few 100 years of history. It's not like forever, yeah.
And the one thing that you know, just to bring us up to the modern day and practical kind of takeaways, is something that does confuse people, and I think it is because we're talking about a separate entity. Sometimes it's just that how companies attack so I thought I'd just finish with a bit of a round up of how taxes work at a high level. So we're not getting into the detail when you register a limited company.
So there is basically the corporation is its own thing that we've collectively imagined and told a story about. We've also told the story that it has to pay corporation tax. Now, back in 1844 there wasn't corporation tax. I think it was 19 something. I can't remember. I will one day write a bit more about this, maybe, maybe not. So I'm not gonna go look at the facts, but it was that, yeah, corporation tax came later than the example I talked about with this Ashford Cattle Market Company Limited. Uh, that is still going today, but yeah, the company pays corporation tax on its own profits. That's calculated based on profits. There's some adjustments that get made. Essentially, it's on the company's profits, so sales less, um, costs, and if you run payroll and employ people, which might be a bunch of people, or it might be just a director slash shareholder slash employee who is one in the same there'll be an element of probably filing monthly payrolls, and there may be some Poe and national insurance that you have going through there. The other one VAT, which is the company on the company's sales. So that is based on whether you register for VAT, which might be that you have to or you choose to.
Won't go too much into that, but that's something that is also at play, and that would usually be filed quarterly and then with your hat on as a director slash employee slash shareholder, you there's, there's various ways you might be extracting funds from the company. And you know that we'd always look at your individual setup on this, but the essentially is probably going to be a mixture of salary, PAYE, National Insurance, contributions obviously apply to that depending on the levels that you're paying yourself and dividends. So because you're a shareholder, you can draw dividends, and those dividends are taxed in a special way, separately from your PAYE earnings, and that's all put on your self assessment, basically, and calculated what your tax liability is. So there's probably a few more like to capital gains and companies, but we'll stick to to the main ones for now. But it's just a little bit of a run through of how it's different, because you are then also personally taxed on your self assessment.
We talk about tax efficiency structures and things like that. And that's, I guess, the aim of some of these things is probably bigger reasons, you know, I usually say than just tax efficiency, why you would be a limited company, because it's probably not worth it if it's just about tax efficiency always. Yeah, so it's just a little bit of an intro then to finish with on the different types of taxes. But yeah, I'd be interested to know your thoughts on the kind of collectively imagined thing that we call companies. And yeah, I've not really said if that's good or bad that, you know, I always say with any of these things, it's not companies are, you know, like anything, or a vehicle, just like money is that we use to do something, and so what we're intentions are behind it? Are trading the business's goals, the businesses actions, that is all what's important. It's not whether it's a company or whatever as such.
So this isn't about like, is it good with it bad? It's just that's curious. I think it's always just remembering that even though it's very formal and official, essentially it's made up, it's made up system, and it will continue to evolve. It's just that we, in some ways, still have a lot of the legacy stuff from hundreds of years ago, which not saying it's good or bad, it's just is how it is. And, yeah, we're still having the same reforms, you know, to keep it to keep that information public. You know this, even for hundreds years ago, they were still interested in making things publicly available to prevent fraud, and we're still talking about fraud today. So, yeah, slightly different topic to talk about with you today. I hope it's been useful, and hopefully this recording actually works as well. I will talk to you soon. You.
