UK PSC Guidance Update: Significant Influence Explained

Assessing significant influence or control has long been one of the most difficult parts of the UK PSC regime. In January 2026, UK authorities published draft statutory guidance that is not yet in force, but signals how future assessments are expected to be approached. This article explains what the draft clarifies and how companies can prepare.

How did the PSC regime work before?

Before the draft update, companies applied the PSC tests using guidance that relied on general principles and examples.

Where ownership or voting thresholds did not apply, teams assessed significant influence or control using judgement. As a result, compliance teams often:

• reviewed shareholder agreements and articles,
• analysed veto rights and reserved matters,
• considered informal influence within groups.

However, documentation practices differed across entities. Some teams kept detailed notes, while others relied on informal reasoning. Therefore, consistency across group companies was often difficult to achieve.

What exactly has changed in the draft guidance?

The draft guidance does not change the legal tests. Instead, it explains how companies should apply them in practice.

First, it clearly separates two assessment routes:

• influence or control based on legal rights, and
• influence or control based on actual behaviour.

In addition, the guidance explains that a person does not need to control every decision. It is enough if the company usually follows their direction.

The draft also provides clearer explanations of:

• when veto rights point to influence rather than protection,
• how strategic decision-making affects control,
• why repeated reliance on one individual matters.

As a result, companies can now apply a more structured analysis.

Which situations should now be reviewed more closely?

The draft guidance is particularly relevant where PSC conclusions depend on interpretation rather than ownership percentages.

Common review triggers include:

• minority shareholders with extensive consent rights,
• founders retaining informal influence after dilution,
• group entities managed centrally without formal control rights,
• joint ventures with unbalanced governance arrangements,
• historic PSC assessments based on informal understanding.

These cases should be reassessed against the clarified framework.

What should companies do in practice?

Compliance teams should focus on process and evidence, not just outcomes.

Recommended steps include:

• revisiting existing PSC assessments that rely on significant influence or control,
• updating internal checklists to distinguish rights-based and behaviour-based control,
• ensuring reasoning is written, dated, and retained,
• aligning approaches across UK entities to avoid inconsistent filings.

Where conclusions remain finely balanced, documenting why a person is or is not treated as a PSC becomes increasingly important.

What does this mean for ongoing compliance?

Once approved, the guidance will be authoritative. Companies are expected to take it into account when making or reviewing PSC determinations.

This does not require immediate re-filing. However, future changes, confirmations, or corrections should reflect the clarified approach.

Monitoring the parliamentary approval process remains essential, as the draft is subject to formal adoption.

What’s next?

Managing a PSC assessment process requires detailed planning and full legal awareness. For more insights into processes in other jurisdictions, explore our article, AGM in Kenya: A Comprehensive Guide to Annual General Meetings.

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