Director of part-time firm but also have permanent job

[Godders9]

Hi all,

So self-assessment has caught me by surprise as my reminder was back in April (SA316) and now I've just had the letter through.

I have a permanent job but I also have my part-time business of which I'm a director. I have taken £0 from my business so far and launched in March 2016 so it's only a small window for which this self-assessment applies.

I don't know what I need to answer for:
If you were an employee, director, office holder or agency worker, do you need to complete the employment section?

How many employments or directorships did you have?

When I said I answered "2" to the second question it asked me for my PAYE for my part-time business but I don't have a PAYE number as I haven't taken any money out and don't intend to salary myself.

Can anyone help please?

[Neil@Intouch]

As you were a Director, the tax return is required.

You will need to complete the employment section for the permanent employment.

If no income was taken from the company you are a Director of no disclose needs to be made. If this a director of a Ltd Company or a partnership etc?

Just select one employment if you are not on the payroll, in which you are a Director. You may have a PAYE scheme open, in which case you would have a PAYE reference number.

[TheCyclingProgrammer]

As you were a Director, the tax return is required.

No, a tax return is required because HMRC have sent him a notice to file one (presumably OP registered voluntarily). We all know there's no legal requirement to submit a tax return simply for being a director.

That said, I'm not sure its possible to fill out an employment sheet without entering payroll information so if you don't have a PAYE scheme and haven't received any income there really isn't anything to declare, I'd just do an employment sheet for your full-time job.

OP - can I ask why you are registered for self-assessment? I'm guessing you followed HMRCs guidance re: directors, which is unfortunate as they are now likely to keep asking you for a return even if you have no other income. If you are also a shareholder in the business and expect to receive dividends in the future then you probably would have had to register at some point anyway so no big deal, but if you're not then its a bit of a pain!

[Godders9]

Hi both - thank you for taking the time to reply. In the end I spent over an hour on the phone to HMRC, bouncing between 4 departments!

I'm not set of on my own business for payroll/PAYE so had to enter "None" in the particular box and go through the remainder of the form with the unfortunate woman on the other end of the phone.

Lesson learned.

[Neil@Intouch]

No, a tax return is required because HMRC have sent him a notice to file one (presumably OP registered voluntarily). We all know there's no legal requirement to submit a tax return simply for being a director.

As a Company Director, you are required to complete a tax return, unless unless it was for a non-profit organisation (such as a charity) and you didn’t get any pay or benefits, like a company car. Not Director in title, but Director of a company on Companies house.

[Darren at Fox-Bartfield]

Self Assessment

Who is required to file a self assessment return

[TheCyclingProgrammer]

As a Company Director, you are required to complete a tax return, unless unless it was for a non-profit organisation (such as a charity) and you didn’t get any pay or benefits, like a company car. Not Director in title, but Director of a company on Companies house.

Neil, you're an accountant, you should know there is no legal requirement for any company director to file a tax return, regardless of what HMRC guidance might say. In fact, there's only a legal requirement to submit a tax return if HMRC issue one and a legal requirement to notify HMRC if you're chargeable to tax.

Seeing as failure to notify penalties are related to the amount of unpaid tax, I would be interested to know what penalty HMRC could levy for failing to register for self assessment as a director with no untaxed income.

[TheCyclingProgrammer]

Who is required to file a self assessment return

HMRC guidance != tax legislation. The HMRC guidance is categorically wrong on this point.

S7, Taxes Management Act, 1970 outlines the legal requirements concerning notification and filing a tax return.

Should a director register for self assessment? | AccountingWEB

[Darren at Fox-Bartfield]

Self Assessment

There is no legal obligation to file a self assessment for directors and have found in recent years HMRC relying on others to register to file. In the contractor space, given that most are shareholders of their own companies and in light of the recent tax changes on dividends, most will now required simply as tax will fall due.

OP won't be required to file a return on the basis of the above, but may well do if there's other sources of income that's not included in details.

[Neil@Intouch]

Neil, you're an accountant, you should know there is no legal requirement for any company director to file a tax return, regardless of what HMRC guidance might say. In fact, there's only a legal requirement to submit a tax return if HMRC issue one and a legal requirement to notify HMRC if you're chargeable to tax.

Seeing as failure to notify penalties are related to the amount of unpaid tax, I would be interested to know what penalty HMRC could levy for failing to register for self assessment as a director with no untaxed income.

Very true. Seeing as most Directors of a Ltd Company are going to be earning over £16,000 (£11,000 personal allowance & £5,000 tax free dividends), tax will be payable and a tax return will be required.