Corporation tax return help please

[floricita]

You're into daily penalties now, not just the flat £100, as you're over 3 months late.

It doesn't matter if HMRC owed you anything for another year, or even that year.

Thanks. Do you know how much they are?

I guess they don't make allowances for incompetence?

[stek]

Thanks. Do you know how much they are?

I guess they don't make allowances for incompetence?

HMRC will let you pay instalments I think

[Clare@InTouch]

Thanks. Do you know how much they are?

I guess they don't make allowances for incompetence?

The penalties were in my other post.

"Over three months late - a penalty of £10 per day for each additional day, up to a maximum of 90 days (£900)"

Many penalties are behaviour related, and incompetence would count as not taking due care at best, and negligence at worst.

[floricita]

I also didn't recieve a letter telling me to complete a tax return does this matter?

[Clare@InTouch]

I also didn't recieve a letter telling me to complete a tax return does this matter?

That's because you didn't tell them you needed one. The onus is on you to tell them, not them to find out.

[TheCyclingProgrammer]

I also didn't recieve a letter telling me to complete a tax return does this matter?

That depends on if you owe any tax or not. Being a company director in itself does not create a legal obligation for you to notify HMRC that you need to file a tax return, despite what HMRCs website says (its the legislation that counts here, not HMRCs poorly written guidelines). Having undeclared taxable income does. Most accountants will advise director's register for SA to be on the safe side as it would be rare for a company director not to have taxable income that needs declaring (dividends normally).

As I've said a few times, if all you ever took from the company was a director's loan then you haven't actually received any income from YourCo, just a loan. So on the personal tax side of things, you *might* be OK. No taxable income = no obligation to notify HMRC = no obligation to file a tax return (as they never requested one). So you might get away with penalties relating to self-assessment.

You may have to register for self-assessment for the current tax year however as by the time you've sorted this mess out, you're either going to end up declaring a dividend in the current tax year to clear the director's loan, or receive a capital distribution upon winding up. Again, it depends on the amounts.

If you declare a dividend, you presumably already have other income thats taxed through PAYE so the dividend may attract tax at the higher rate - you may be able to ask HMRC to collect the extra tax on this through your tax code though so you may still get away with not having to register for SA. But you will need to notify them and ask them.

Likewise, if you receive a capital distribution and it falls within your CGT allowance for the year, then there should be no need to notify HMRC or register for SA.

But as has been pointed out several times, there may be BIK implications of your directors loan. You haven't told us how much you have taken out of the company but if its under £5k then you should be OK there. If its more than this then you will likely owe tax/NI on the BIK. There is still a potential corporation tax charge on an overdrawn directors loan account its still overdrawn 9 months after your company financial year end though.

[floricita]

Thanks.

I would have to check the amounts but I think the amount taken would be around 7 or 8kish

[TheCyclingProgrammer]

Thanks.

I would have to check the amounts but I think the amount taken would be around 7 or 8kish

So there's likely to be a BIK issue to deal with. I'm not sure if you can retrospectively accrue the interest and add it to what you owe to avoid this. You will have to ask an accountant how to deal with this.

When was your company year end (the year in which you took the loan)?

[floricita]

And just for my own mind, just a very rough approximation of how long it would take an accountant to do this would be?

Like are we talking weeks or months?

[floricita]

So there's likely to be a BIK issue to deal with. I'm not sure if you can retrospectively accrue the interest and add it to what you owe to avoid this. You will have to ask an accountant how to deal with this.

When was your company year end (the year in which you took the loan)?

I would have to check with the documents I have for the details