Self assessment

[xoggoth]

This question has come up very recently on accounting web, directors are not legally required to do SA unless there is tax due:

Tax returns for directors | AccountingWEB

Self-assessment | AccountingWEB

[ASB]

accountant has gone home for the day so will buzz him tomorrow.

Another question regarding 2010/2011

For 2010/2011 I earned £1800 from rental income.


Am I right I can 'make' tax for 2010/2011 within personal allowance threshold and pay £1800 extra in corp tax on dividends-or does it not matter? I basically want my PAYE income to be as low as possible i.e. £7k.

Jubilee

The income accrues to the entity that earned it. I imagine this was you. Anyway it will make no difference to your tax bill (edit, I mean the same amount of tax will be payable whether it is earned by uoirself personally or by the company). Also, if it was income gained from your main property check out the rent-a-room scheme.

[jubilee]

accountant has gone home for the day so will buzz him tomorrow.

Another question regarding 2010/2011

For 2010/2011 I earned £1800 from rental income.


Am I right I can 'make' tax for 2010/2011 within personal allowance threshold and pay £1800 extra in corp tax on dividends-or does it not matter? I basically want my PAYE income to be as low as possible i.e. £7k.

Jubilee

[xoggoth]

You jumped in before I changed it, as I went, ooer, maybe what I said as out of date. Actually, think the link and what you are just put are still right. If you haven't been sent a tax return and have no income on which further tax is payable there is no onus to fill one in. According to Citizens Advice Bureau anyway.

May be useful to do so in some cases, if you have business expenses you may get your tax code reduced.

[jubilee]

thanks!

I'll get on it!

Jubilee

[Clare@InTouch]

Not a pro like Clare but that's not true as I understand it.



Directors' tax returns - Company directors - tipsandadvice-businessdatabase.co.uk

Owing them money usually means that all your income - salary+divi+any interest etc puts you over the higher rate limit. If you do need to do one, you have till Jan 31st online but leave enough time to register.

PS *****If you do need to fill one in you have 2 days to do it!



HM Revenue & Customs: Registering for Self Assessment

If you go back to the actual legislation then you're right, but in my experience it's not worth arguing with HMRC in this matter. Most of the time HMRC people don't know about the original legislation, so will argue a return is necessary anyway. If the tax return relates to a period when the OP was employed then it's likely a very simple return and no tax is due, so any penalty should be appealed and cancelled. If however he took dividends during March 2010 then there may well be tax due, and HMRC should have been informed last year.

It's one of those "ask your accountant" questions because the answer will depend on personal circumstances.

[xoggoth]

There were changes to the law that came in recently - penalty is no longer capped at outstanding tax amount.

http://www.hmrc.gov.uk/manuals/salfmanual/SALF208A.htm

[xoggoth]

I did post that that wasn't true and quoted this link. However, have been recent changes to law see next post.

If not, then despite the Taxman’s assertion that all directors need to submit a return form, you don’t need to bother. If you do owe tax, then the same time limits apply as if you had received a form.

Directors' tax returns - Company directors - tipsandadvice-businessdatabase.co.uk

Owing them money usually means that all your income - salary+divi+any interest etc puts you over the higher rate limit. If you do need to do one, you have till Jan 31st online but leave enough time to register.

PS *****If you do need to fill one in you have 2 days to do it!

The latest you can register is by 5 October after the end of the tax year for which you need a tax return. The tax year runs from 6 April one year to 5 April the next. So if, for example, you have tax to pay on rent from a property in the 2010-11 tax year, you need to let HMRC know by 5 October 2011.

http://www.hmrc.gov.uk/sa/register.htm

[Clare@InTouch]

You should have informed HMRC that you needed a tax return, the onus is on YOU to contact them. Give them a call and tell them you're a director of a limited company - 0845 9000 444. You're supposed to register within 3 months of becoming a director. HM Revenue & Customs: Registering for Self Assessment

If you started in March 2010 then you should have filed a tax return for 2009/10, which was due at HMRC by 31 January 2011. If there was no tax to pay then you can appeal any penalty and they should reduce it to zero.

Might be an idea to talk to an accountant too

[jubilee]

Hi there

When does the Inlanrd Revenue contact Directors to submit a self assessment?

I formed my Company in March 2010 but havent heard anything and my accounts are due in Dec 2010 but I'm not clear what relation this has to Self Assessment (I've never done it before) so any help will be much appreciated!

Jubilee