Self Assessment Dividends

[GMScribe]

Hi Guys,

I'm just filling out my self assessment. I am a lecturer who runs a secondary business as director through a Ltd company and get paid via PAYE for lecturing and purely via Dividends for my company (as per previous forum advice).

My issue is that I do not yet have a PAYE reference as a director so can not add it as an employment on the on-line form. If I received no income do I still have to add this employment to my tax return by registering myself for a PAYE code?

Many thanks

[GMScribe]

Just to add I do not have a contract of employment.

[Williams lester]

No, do not add an employment if you are not an employee!

[elainec100@cheapaccounting]

Employment section for your full time role and then fill in dividends received from the limited company.

[etrades]

Hello,

i have a question related to same topic, i work part time in a retail store and i formed a LTD company last feb and am the only director, after which i started withdrawing income in form of dividend

Now as i withdraw my income only in dividend, will i be classed an employed(as a director) or is it 100% compulsary for me to register as self-employed !

Any help much appreciated :)

[etrades]

Hello,

Just a quick question on similar matter, i set up a pvt ltd company in feb 2009 and since then withdrawing income from business as Dividend only. i have a prt time Retail job as well. however i was not aware that i have to register for self employment. As i was under inpression that a Director is always an Employee

so here's my query

1> Can i still register for UTR number For Self-Emp. by paying £100 Penalty
2>Is it necessary for me to register for S.E, Can i not continue to receive dividend just a Director being employee of the company and the only shareholder
(Its a online Sales business using platform AMAZON,WEBSITE & EBAY)

Any suggestions will be highly appreciated

Regards:)

[David Griffiths]

As a director of a limited company you are not self employed and do not have to register as such

There is no obligation on you to complete a self assessment tax return, unless one is issued to you by the Revenue. It used to be standard practice for them to issue returns to all company directors, but over the last four or five years they seemed to have changed their practice, and do not now issue returns as a matter of course.

However, there is an obligation laid on you to notify the Revenue if all of your income is not completely taxed. They can then issue a return for completion

You need to add up the gross value of all of your income. Gross salary from your P60, gross bank interest, and the gross value of dividends. You find that by multiplying the actual payment by 10/9 to account for the (purely notional) tax credit that is attached to them.

If your total gross income exceeds £43,875 then you will be a higher rate taxpayer and must notify the Revenue. Use form SA1. (http://www.hmrc.gov.uk/sa/forms/sa1.pdf)

If you are a basic rate taxpayer then the tax credit means that all tax on the dividends is covered by the tax credit and you need do nothing

To anticipate the usual objections, the Revenue website suggests that you must fill in a tax return as a company director. That is not correct in law - they can certainly ask you for one, but if they don't there is no obligation to fill one in as a basic rate taxpayer.

[etrades]

Thankyou very much for your input , basically am a visa national and we have to submit proof of our earning , as i have been doing business i showed my income to home office as per my message.


They have got back to me Saying taking dividends out from profits is okay n they can verify my income , however they are insisting that i was supposed to be registered as "self -employed" when i m a director of my own company. which is strange because a director is still an employee of the company(thats what i assumed .

and i am unable to find any reference on HMRC website which i can show them to proove that it was not required for me to register for self-employment

if theres any way please do suggest me and i would be really thankful to you and the members of the forum

Regards

[Zeno]

Thankyou very much for your input , basically am a visa national and we have to submit proof of our earning , as i have been doing business i showed my income to home office as per my message.


They have got back to me Saying taking dividends out from profits is okay n they can verify my income , however they are insisting that i was supposed to be registered as "self -employed" when i m a director of my own company. which is strange because a director is still an employee of the company(thats what i assumed .

and i am unable to find any reference on HMRC website which i can show them to proove that it was not required for me to register for self-employment

if theres any way please do suggest me and i would be really thankful to you and the members of the forum

Regards

You are quite right that as a director of a limited company you are not self employed at least in the eyes of HMRC.

It may be that the Home Office has different criteria (would not surprise me at all).

[David Griffiths]

As I see it there are two possibilities:

1 download the form that I linked, tick the box marked I am a company director and send it in. That will probably get you the UTR that you need to satisfy the clowns who think that you are self employed, but you will have to complete unneccessary self assessment forms

2 write to the tax office dealing with the company's affairs. Ask them to confirm in writing that as a company director you do NOT have to register as self employed. Send that to the clowns and hope that they recognise that HMRC know more about these things than they do. Not guaranteed, of course.

[etrades]

Hello David,

Once again Thanks a lot for all the information you gave me, I only have one problem that i have only 3 days to reply them , and am sure even if i register with HMRC for UTR number i wont get it by then and so is the Letter that you suggested in option 2.

I am ready to pay some fees for the accouting and service that i need but am not really sure how to get this done.

Please suggest

Regards