LTD but not required to submit SA/personal tax returns

[Nixon Williams]

I would always recommend that a contractor who operates through their own limited company should complete a tax return each year.

Most contractor accountants include the director's tax return as part of the normal service so it should not be any great effort to have one submitted on their behalf.

Alan

[bourneagain]

Also the other aspect to my question was if the director only ever withdraws within the upper tax threshold to avoid attrating higher tax and hence having to return a SA, how does he then extract the funds that eventually build up in the business account without attracting additional tax? only way I could think of is liquidating the company. Is that common practice though?

[Maslins]

I'd agree with Alan that there's no harm in doing one.

Re build up of funds, pension scheme would be a common one, occasionally taking extra dividends and accepting the personal tax hit on it, or going through an MVL then taking a break like you suggest.

[Jeremiah@RHJAccountants]

I would always recommend that a contractor who operates through their own limited company should complete a tax return each year.

Most contractor accountants include the director's tax return as part of the normal service so it should not be any great effort to have one submitted on their behalf.

Alan

I would agree with this.

[Greg@CapitalCity]

Not according to HMR&C and they're the ones who tend to get a bit stroppy about that sort of thing

Maslins has picked up on a technical point, and is right, there is no legislative requirement for a Director to register for self-assessment. The HMRC however do have a 'policy' where all company directors are to file a personal tax return. Its one of those rare cases (not!) where HMRC policy does not reflect the legislation (section 7 & 8 of Taxes Management Act 1970).

Having said that, I agree its good practice that all Directors complete a personal tax return.

[Acme Thunderer]

Maslins has picked up on a technical point, and is right, there is no legislative requirement for a Director to register for self-assessment. The HMRC however do have a 'policy' where all company directors are to file a personal tax return. Its one of those rare cases (not!) where HMRC policy does not reflect the legislation (section 7 & 8 of Taxes Management Act 1970).

Funnily I had this very discussion with my accountant but on my wife's behalf. She is a director of MyLtd but receives no salary (she does have a 10% shareholding). Our accountant said she didn't need to fill in a SA, but I queried saying the HMRC webite said she did. He said don't worry as the HMRC policy is not backed up by legislation - however if tax was due that is a different matter.

[jamesbrown]

Maslins has picked up on a technical point, and is right, there is no legislative requirement for a Director to register for self-assessment. The HMRC however do have a 'policy' where all company directors are to file a personal tax return. Its one of those rare cases (not!) where HMRC policy does not reflect the legislation (section 7 & 8 of Taxes Management Act 1970).

Having said that, I agree its good practice that all Directors complete a personal tax return.

Interesting, thanks for the info.