Reply to: Self-Assessment

[Fred Bloggs]

Realistically would you be a director and not take >10k divs in a typical contractor ltd setup ?

I did that in 15/16 and 16/17 tax year.

[Mark2009]

Hi
Thanks for your comments but I have decided to let my accountant go I am under no contract and its time to move on.

Kind Regards

Mark

[pr1]

Realistically would you be a director and not take >10k divs in a typical contractor ltd setup ?

Yes, typically spouses with <20% shares

[kaiser78]

Hmm I always get this mixed up. I thought the argument was you don't need to fill one in just because you are a director. You must do for dividends >10k though. How do you pay the right tax on such a large amount of dividends if you don't do an SA?

Realistically would you be a director and not take >10k divs in a typical contractor ltd setup ?

[northernladyuk]

Hmm I always get this mixed up. I thought the argument was you don't need to fill one in just because you are a director. You must do for dividends >10k though. How do you pay the right tax on such a large amount of dividends if you don't do an SA?

Well... I have to say I am thinking back to pre divi tax, as I've been out of the country for a little while now.

Back then there the >10k divis self assessment category was invented by HMRC and had no basis in law, so could be ignored (arguably). I suppose if there is no other way of paying divi tax, then self assessment it is.

[TheCyclingProgrammer]

Hmm I always get this mixed up. I thought the argument was you don't need to fill one in just because you are a director. You must do for dividends >10k though. How do you pay the right tax on such a large amount of dividends if you don't do an SA?

The same reasoning for not needing to fill one in just because you're a director also applies to dividends. You only have an obligation to report to HMRC if you have untaxed income or gains.

This depends entirely on the wife's other earnings but if she has no other earnings, £10k of dividends will fall within her personal allowance (and there's also the £5k nil rate band on top of that for dividends).

TLDR; if there's no tax due on the dividends because it's all within the personal allowance and/or the dividend nil rate band, there's no need to notify HMRC and file a tax return.

Even if she has dividend income in excess of this and has tax to pay, she may still be able to ask HMRC to reclaim the tax through her tax code, it depends on how much the tax due is.

[TheCyclingProgrammer]

OP, if you want to do a DIY Self Assessment return, I recommend you take a serious look at a software package called TaxCalc. It costs around GBP 25 (for up to 6 returns in that year) and is worth every penny. If you follow the software prompts and use the inbuilt help system along with the HMRC guidelines you'll do your own tax return and your partner's very easily. TaxCalc also advise you by phone or email on filling the form(s) in (they will not, however, answer any questions about tax) and they are very good. I used it myself for the first time in 16/17 and I am certain to continue using it for as long as I need to do a tax return ever year. HTH.

Why would you need this when the HMRC self assessment software is free and all you really need if your affairs are simple (1x employer sheet for YourCo, fill in the dividends section - that's it)?

[northernladuk]

That doesn't require a self-assessment, although HMRC will claim that it does.

Hmm I always get this mixed up. I thought the argument was you don't need to fill one in just because you are a director. You must do for dividends >10k though. How do you pay the right tax on such a large amount of dividends if you don't do an SA?

[pr1]

Why is your wife doing a self assessment?

to pay her dividend tax

[northernladyuk]

You'd assume it's because she's got income from dividends greater than 10k.

That doesn't require a self-assessment, although HMRC will claim that it does.

[northernladuk]

Why is your wife doing a self assessment?

You'd assume it's because she's got income from dividends greater than 10k.

[northernladyuk]

I work through my own ltd company signed off by accountant and all payments made to HMRC, my accountant set my wife up as a share holder only and 1 week ago we got the self assessment form through the post.
I spoke to the accountant and he said you can do it yourself online I have asked him to do my wifes accounts but he has not contacted me via e.mail.

With dividends and wages under 12000

Thanks

Mark

Why is your wife doing a self assessment?

[Fred Bloggs]

OP, if you want to do a DIY Self Assessment return, I recommend you take a serious look at a software package called TaxCalc. It costs around GBP 25 (for up to 6 returns in that year) and is worth every penny. If you follow the software prompts and use the inbuilt help system along with the HMRC guidelines you'll do your own tax return and your partner's very easily. TaxCalc also advise you by phone or email on filling the form(s) in (they will not, however, answer any questions about tax) and they are very good. I used it myself for the first time in 16/17 and I am certain to continue using it for as long as I need to do a tax return ever year. HTH.

[northernladuk]

I'm not surprised if that's the answer/advice they gave.

[Mark2009]

Have you checked your engagement letter? I imagine they will want to charge you for the first one as you've not been with them a year and they'll charge you to do your wifes.

2nd year with my accountant but if he does not reply I will take my custom elsewhere, always paid up via internet banking, feel a little let down by the firm.