I stand corrected
I don't deal with small/closely held companies, so I didn't know there was a MLR requirement in relation to substantial shareholders. But the OP's question was phrased in terms of when shareholdings are required to be reported to Companies House, and I stand by my answer that they are not, and so the bank is wrong to expect to rely on Companies House records to confirm whether the wife and son are still shareholders.
Directors and shareholders are different things
The person at the bank seems to be confused. Directors and shareholders are entirely different animals. The fact that they happen to be the same people, in the case of many smaller businesses, is irrelevant.
The bank does not need to know and should not care who the shareholders are. That has nothing to do with operating the bank account, which belongs to the company (run by the directors) and not to the shareholders.
Consider a large listed company, with shares traded every day on the stock exchange. Would the bank require an updated copy of the shareholders' register every day? Or after every trade? Of course not. The up-to-date shareholder's register of every company must be made available for inspection (on application, for a "proper purpose"), but is not a matter of public record and is therefore not filed at Companies House. Share transfers are not generally reportable to Companies House. The bank should not expect Companies House records to tell them who is a shareholder at any given time.
Changes of directorships, on the other hand, are required to be notified to Companies House within 14 days of the appointment or resignation/removal. Companies House then update their records (which may perhaps take a couple of weeks) and then a basic company search (available free online) will show the up-to-date list. That list is a matter of public record and should be perfectly adequate for the bank.
The bank is perfectly within its rights (and in fact is required by law) to verify the identities of all the directors of a company whether or not they are signatories on the account (and can suspend the account if those directors fail to comply), but it has no right or obligation to verify the identities of any shareholders who are not directors. And to require share transfers to be undertaken so that the sole director is also the sole shareholder is ridiculous and way outside the bank's rights.
As an aside, though, I would think it quite unusual to trust a person to be a director of a company, with all the powers and duties that position confers, and yet not trust them to operate the company's bank account. They can commit the company to legal liability under a contract, but they can't then sign the cheque to pay that liability? If they really cannot be trusted that far, then it is better that they are not directors, so I can understand why the bank would insist on all directors being signatories on the bank account. But it has no right to insist that they give up their shares.
Not a loan relationship
The debt didn't arise from the lending of money, so as long as no instrument has been issued representing security for the debt (ie it has not been converted into a promissory note or similar) it's not a loan relationship, it's just an unpaid trade debtor. The write-off therefore isn't a debit on a loan relationship, it's an impairment of a trade receivable and is deductible in the normal way. The connected party rules in the loan relationship code are irrelevant.
Yes, it's allowable
He's taken out a loan in order to purchase a business asset, so the cost of that finance (ie the mortgage interest) is a business expense. It makes no difference that the loan is secured on some other asset.
Firstly, it is the directors' responsibility, not that of the auditors, to decide whether to withdraw and resubmit the accounts. If the directors decide to go down that path, the auditors then have just two options: audit the amended accounts and issue an appropriate opinion, or resign their appointment. The question for the directors is: is it worth forcing them to make that choice?
Secondly, as johngroganjga says, you'll get the tax back when you submit this year's accounts and tax return with the write-off. In purely economic terms the cost to you of not resubmitting is therefore just the time value of being deprived of the tax on £1m turnover for one year - maybe £20-25k, depending on your cost of capital. But, of course, if there are cash flow or loan covenant difficulties the real value to the company might be more than that.
If the auditors think the accounts were correct and the proposed amendment is wrong (ie they disagree with you about the facts and/or the law and/or the relevant accounting standards), and the amendment is material, then the auditors should qualify the revised accounts. In such a case, HMRC would not be likely to accept the revised tax treatment on the basis that it relies on incorrect accounting, and you will have achieved nothing other than annoy the auditors (and probably also HMRC).
If the auditors agree that there was a material error, but don't want to resubmit just because they are embarrassed at having previously given a clean opinion on accounts now found to have contained a material error, then they are at best unprofessional, your relationship with them is already unsatisfactory, and you should look for new auditors anyway (and maybe also report them to their professional body).
The hardest situation to resolve is if the auditors agree there was an error but think the accounts were materially correct anyway (ie the proposed change is not material). You are entitled to resubmit anyway, and if the directors decide to do so the auditors must either give you a clean opinion (because by definition the amended accounts are still materially correct) or resign. You should be able to get your tax back a year earlier than you would have had it anyway, but your relationship with the auditors is likely to be significantly damaged. They have a professional reputation to maintain and protect, which is likely to be damaged by a client withdrawing and resubmitting accounts they had previously signed off, and if it's not material (ie they still regard the original accounts as having been perfectly adequate) they might well view it as unreasonable that you should put them in that position. Your position of course would be that it is material to you and that your action is therefore not unreasonable - they might or might not see that, but either way they won't like it. Is that worth c.£25k to you?
No, not necessary
Shares must be numbered, unless all the shares of a class are fully paid and rank equally, in which case they need not be (CA2006, s543). If the shares are numbered, under the Model Articles for a private limited company (SI 2008/3229 art 24(d)) each share certificate should state the identifying numbers of the shares it represents (otherwise it merely states how many shares it represents). However, there is no requirement for those share numbers represented by any given certificate to be consecutive.
There is no requirement for the certificate itself to be numbered at all. If the company chooses to number the certificates, it can do so in any way it chooses, consecutive or not.
However, it is presumably easier to ensure both completeness of the records and absence of duplication if consecutive numbers are used.
ICAEW says no
I've just read the ICAEW paper to which you refer. It essentially says no, it is not possible to adopt a policy of non-depreciation except in very limited circumstances. The Companies Act requires tangible fixed assets with a limited economic life to be depreciated, as do FRS15 and the FRSSE. The cases where depreciation is not applied are: land (which is taken to have an infinite life); investment properties (which according to SSAP19 are held for their investment potential, rather than being "consumed" over their life); and the rare cases, as George mentions, where depreciation would be immaterial (because of either a very long useful life or a very high residual value). None of these are relevant in relation to your client's computer equipment.
You don't have to use straight line depreciation, though - you could use a reducing balance or sum-of-the-digits methods, either of which would give you a higher depreciation charge in earlier years compared to the straight line method.
Check the documentation
The consequences of breaching covenants vary, but there will be a clause somewhere in the loan documentation that sets out the bank's rights in the event of breach. It is quite likely that the loan would become immediately repayable in full, and the bank may also have fixed or floating charges over the company's assets, enabling it to take the assets and sell them. The bank may choose not to enforce those rights, but I wouldn't count on it.
If a breach is foreseeable, and depending on the company's relationship with the bank, the best course of action may well be to tell the bank that there may be an issue and enter into renegotiation now. The bank is making a profit on the loan - it's in their interests to renegotiate now and continue that profitable relationship. If your brother's company waits until a breach has occurred, the bank will not want to continue the relationship where it stands to lose some or all of its capital, and so will want to exit immediately, giving the company a major cashflow crisis.
No, still 25%
Section 458(1) CAA 2001
It's still nonsense
I wasn't aware of the case law - thanks Nicholas for pointing that out.
So according to paragraph 7 of the document for which Ronnie provided the link, s.443 CA 2006 is about correcting a known fault in relation to the filing deadline, but the same known fault in relation to every other reference in the Act to a period of months is left uncorrected?
The government is even more daft than I thought. They've spent years on company law reform, produced the longest Act of Parliament ever, delayed implementation because Companies House systems weren't up to the job, and yet a period of months still doesn't mean what every normal person thinks it means, except in one particular instance where it does. How absurd.