Introduction to Lucy Hardman, Director at A&M Taxand

We are delighted to welcome Lucy Hardman as a Director to our A&M team in London.

Lucy has more than 10 years of United Kingdom ("U.K.") taxation experience with a focus on advising investment funds and their executives. Prior to joining A&M, Lucy was a Senior Manager in EY’s Transaction Tax team where she managed tax reporting engagements for large private equity houses as well as providing tax advice to the fund and fund executives. Lucy has a master’s degree from the University of Bristol and is a member of the Chartered Institute of Taxation. 

Contact Lucy Hardman. 

U.K. Government announcement on a new Health and Social Care Levy

Boris Johnson made his Health and Social Care Levy announcement to the House of Commons on Tuesday 7th September. 

With effect from 6th April 2022, the U.K. Government are proposing to increase U.K. National Insurance Contributions (“NIC”) by 1.25% as well as increase Income Tax rates on dividend income by 1.25% across all tax bands (shown in the table below). 

To read our full article on the new Health and Social Care Levy, please click here.

Guest article by Ellis Wilson: Financial Conduct Authority (“FCA”) forecasts stormy weather for Regulatory Umbrellas

The “regulatory umbrella” or “host” model has provided a convenient way for new asset managers to by-pass the slow FCA authorisation process.  The “Principal” firm, one with an FCA licence, takes the regulatory and capital risk, while the asset manager concentrates on launching its business. 

In the latest FCA business plan, the regulator warns of “tightening supervision”, “more timely” reporting and improved “oversight and due diligence” to reduce “significant risks” in the business model. Umbrella firms are in the middle of a regulatory storm that’s likely to rain-down higher fees on their clients.  

The business model requires umbrellas to have a wider range of FCA permissions than an asset manager may need. These permissions sit alongside the umbrella’s core activities, like legal services, fund administration or regulatory consultancy. 

Clients must adopt the Principal’s compliance framework, not one that’s necessarily suited to their needs, the umbrella model needs to be explained to investors, which may hamper new investment and senior managers and staff still need to be registered with, approved by and accountable to the FCA. 

Professionally, reputationally and for efficiency, a point may be reached where having a firm’s own FCA licence makes sense. Everything a firm needs for FCA authorisation is likely to be in place, a business plan, a proven business model, a budget, service providers, even the senior manager who ends up answering all the compliance questions. Independent authorisation could mean the asset manager reduces compliance costs, has full control of its business activities and can start to build its own independent track record. 

Engaging a trusted regulatory consultant like Ellis Wilson to help prepare and manage your FCA authorisation means you’ll work with experienced consultants who will help you present your application clearly and objectively to the FCA, ensure a smooth authorisation process and be a reliable compliance partner for you in the future.

Regulation can be frustrating, but no more so than when a firm is forced to follow another firm’s processes, policies and compliance procedures. In our experience, when FCA rules are applied efficiently and effectively, they make sense, and the benefits of independent authorisation will be clear. 

To discuss the benefits of having your own FCA regulatory licence and how Ellis Wilson can help, contact them here.