Director with no salary - self assessment options

[mradam]

Hi there

I am new to contracting so please forgive me.

I left employment in October and was paying tax at the higher 40% threshold. I then started my own consultancy business and since then have been paying myself dividends only, with no salary, as I had already used my personal allowance for the year.

I am now filling in my self-assessment form as I believe I am owed about £2,500 tax from my previous employment as I was paying tax as if I would earn well over the 40% limit and in reality my total earnings (inc dividends) are now under £40,000.

As I have no payroll, I do not have a PAYE ref , have taken £0 salary and have paid £0 on that salary.

Question 1 - Do I list my consultancy firm as an employer for this year, or just fill the employment form in for my initial employment.

Question 2 - I have currently put my consultancy limited company in as a second employer, and it allows me to put £0 in for salary but is saying I need to put at least £1 in the "Tips and other payments not on your P60" field. How can I put this as I have received nothing but dividends and expenses.

Question 3 - If I do need to put this consultancy limited company in as an employer, do I list sum up all of my expenses paid to myself this tax year and put them in the final field of the following page "Expenses payments and balancing charges"?


It seems to me that the point I make in question 2 makes putting this as an employment impossible?

Thanks for your help and apologies if I am covering old ground but 45 mins of googling and reading hasn't helped!!

[TheFaQQer]

Wow - someone's keen to get sorted!

Since you have plenty of time to work out what you need to file, why not make the most of the opportunity to consult your accountant and see what they recommend? Many include self assessment in their standard fee (I know InTouch do, but my previous one didn't).

[northernladuk]

I didn't think they did for a part year so he might have to pay for the first one.. But still looks like it would be money well spent.

[mradam]

I've dropped an email to my accountant but he's on holiday until next Weds.

I know there's no urgency but as mentioned I am pretty sure I am owed over £2000 and I could really do with the cash !!

I will be seeking professional guidance either way, but what is "normal" behaviour on a self assessment for a director who takes zero salary or payment other than dividend?

[northernladuk]

Your accountant went on holiday over the new tax year??? Wow.

[Contreras]

This should be answered in the guidance notes - SA150.

Have a read of this other thread starting here.

[mradam]

Your accountant went on holiday over the new tax year??? Wow.

Tell me about it! Easter holidays mind and he has 3 younguns

[mradam]

This should be answered in the guidance notes - SA150.

Have a read of this other thread starting here.

That thread is really helpful thanks, however I'm at a sticking point as I have received expenses but not salary / benefits.

At the end of the day it is impossible for me to fill out the employment accurately as it won't let me do £0 for salary and tips. And from what I can tell if I have received expenses it counts as an employment.

Thanks for your advice anyway.

[Contreras]

That thread is really helpful thanks, however I'm at a sticking point as I have received expenses but not salary / benefits.

At the end of the day it is impossible for me to fill out the employment accurately as it won't let me do £0 for salary and tips. And from what I can tell if I have received expenses it counts as an employment.

Thanks for your advice anyway.

What expenses exactly? Probably there should be a P11D, but you have no employers reference number. If the expenses are without doubt wholly and necessary for business and no tax is due then I would conveniently overlook them, TBH. HRMC have bigger fish to worry about.

Or you could complete a paper assessment. Downside to this would be no instant calculation as with the online version prior to submission. So worth getting the accountant to look it over before submission if you do this.

Btw, be aware that the expense amount must be entered twice in order to cancel out. Quite pointless really.

[mradam]

Thanks Contreras.

Expenses have purely been mileage and travel to and from work (when not my standard office) and lunch and occasional coffee when traveling to sites away from normal working location.

I've also had to expense an item bought FOR my client's business (a router) which was £40.