Do I need to submit a self assessment return?

[nick_e]

Hello

I registered a LTD business on the 04 Sep 2014 - as a new company director, do I need to submit a self assessment tax return by Jan 31 2015?

Thank you

 

[jpopat]

The self-assessment tax return is to declare your personal income, so not directly linked to the fact that you're director of a Ltd Company.
If your personal income is from employment with another company, i.e. your income is taxed at source via PAYE, you shouldn't need to complete a tax return.
If you've drawn any money from the Ltd company since inception, that would fall in to the tax year 2014/15 - the tax return for the tax year won't be due for submission until 31st Jan 2016.

 

[MyAccountantOnline]

Hello

I registered a LTD business on the 04 Sep 2014 - as a new company director, do I need to submit a self assessment tax return by Jan 31 2015?

Thank you

Have you received a Self Assessment tax return from HMRC?

If not do you have any untaxed income, higher rate tax to pay or any Capital Gains tax to pay?

 

[TheCyclingProgrammer]

Probably no, for two reasons:

1. Sep 2014 falls under the 2014/15 tax year. Tax returns for that year are not due until next Jan.

2. There is no statutory requirement for a company director to submit a tax return, despite guidance from HMRC to the contrary.

Your legal obligation is to report any undeclared income not already taxes at source. If you take a basic salary, dividends up to the higher rate threshokd and have no other income or benefits then you likely have nothing to report to HMRC.

If HMRC pick up on the fact that you're a director and issue a notice to file a return after April, you have to complete one even if no tax is due. Their policy is that they want directors to submit returns so they are unlikeky to rescind the notice. But it won't be due until next Jan.

Some accountants advise directors voluntarily register if there is any possibility that the director may have tax to pay to avoid potential fines for failure to notify but that's up to you and probably something worth discussing with your accountant.

 

[MyAccountantOnline]

No, for two reasons:

.......

I disagree we dont know if the OP has actually had a tax return hence my question above.

If a Return (or a request to complete a Return has been issued) it must be completed and submitted to HMRC.

 

[john1989]

We don't know if they OP has to complete a 13/14 tax return or not because there's not enough information.

 

[TheCyclingProgrammer]

We don't know if they OP has to complete a 13/14 tax return or not because there's not enough information.

Edited to be clearer but I think my post covered that.

Edit: meant to quote your previous post, but I did state that OP needs to notify HMRC if they think they owe tax and if they receive a notice to file one.

 

[john1989]

Your post is clearer now.

What's worrying is that the OP has started a Ltd conpany but doesn't know which statutory deadlines apply to them. The OP needs professional advice.

 

[jpopat]

I think we're swaying from the original query; the OP is wondering whether they need to file a self-assessment tax return as a result of their being a director of a recently incorporated company. No other info is provided, therefore is it worth speculating on unknowns?!

 

[TheCyclingProgrammer]

I think we're swaying from the original query; the OP is wondering whether they need to file a self-assessment tax return as a result of their being a director of a recently incorporated company. No other info is provided, therefore is it worth speculating on unknowns?!

Well its not that complicated - there's only one unknown that needs to be considered and that is, as Nicola said - does OP have any untaxed income in the 2013/14 tax year and have they been sent a notice to file a return?

If the answer to both of these is NO, then as far as the 2013/14 tax year and the 31st Jan 2015 deadline goes, then the answer to OPs question is almost certainly NO.

More to the point, as their question relates to the 2013/14 tax year, their new company/directorship is irrelevant.

What was OP's source of income from April 2013 - April 2014?

 

[nick_e]

Wow - lots of replies. My source of income from Apr 2013 - Apr 2014 is PAYE and still is. I have not received anything from HMRC asking me to do a SA tax return. Thanks

 

[TheCyclingProgrammer]

Wow - lots of replies. My source of income from Apr 2013 - Apr 2014 is PAYE and still is. I have not received anything from HMRC asking me to do a SA tax return. Thanks

Then you don't need to do one. See my first post regarding the current tax year and next year's deadline.

 

[nick_e]

Thank you

 

[nick_e]

Sorry one more question ,relating to dividends.

HMRC say the following for dividends:

If you own shares in a company, you may get a dividend payment.

You must declare all your dividends in your SA tax return fter the end of the tax year.

You don’t have to do anything more about tax on your dividends if:

• you’re a non-taxpayer
• you pay the basic 20% rate of Income tax

---------------------------
If I add my brother as a shareholder and he takes money out the business (he's on a 20% rate of income tax) would he have to pay any tax if he withdrew £80k ? Equally, if he then "gifted" me the £80k would I then have to pay tax on that? Thanks

 

[MyAccountantOnline]

Sorry one more question ,relating to dividends.

HMRC say the following for dividends:

If you own shares in a company, you may get a dividend payment.

You must declare all your dividends in your SA tax return fter the end of the tax year.

You don’t have to do anything more about tax on your dividends if:

• you’re a non-taxpayer
• you pay the basic 20% rate of Income tax

---------------------------
If I add my brother as a shareholder and he takes money out the business (he's on a 20% rate of income tax) would he have to pay any tax if he withdrew £80k ? Equally, if he then "gifted" me the £80k would I then have to pay tax on that? Thanks

What tax your brother pays will depend on his total income but with £80k net dividends yes he would be paying tax on that.

You wouldnt pay Income tax on monies gifted to you.

 

[nick_e]

Thanks for your reply... So is there anything stopping me adding 10 shareholders who are unemployed or students - they take out £8k in dividends each and then each of them "gift" me £8k each?

 

[UK Contractor Accountant]

My god they are generous shareholders gifting you all that money?

Hold on a minute, no it must be some artificial circular scheme whereby nothing happens apart from the avoidance of tax!

 

[MyAccountantOnline]

Thanks for your reply... So is there anything stopping me adding 10 shareholders who are unemployed or students - they take out £8k in dividends each and then each of them "gift" me £8k each?

Quite simply that's tax evasion

Not a wise plan at all.

 

[MyAccountantOnline]

A much better plan is to appoint a good accountant who will look at legal ways to save you tax

 

[john1989]

Tip of the day:

Spend more time on your business than trying to concoct ways to evade tax.

 

[nick_e]

Thanks all

 

[TheCyclingProgrammer]

What tax your brother pays will depend on his total income but with £80k net dividends yes he would be paying tax on that.

You wouldnt pay Income tax on monies gifted to you.

Not sure I agree with last line. If brother is given shares, receives a dividend then gifts the proceeds back to OP, there's a risk of HMRC challenging the arrangement under settlements legislation.

 

[TheCyclingProgrammer]

Thanks for your reply... So is there anything stopping me adding 10 shareholders who are unemployed or students - they take out £8k in dividends each and then each of them "gift" me £8k each?

Google "settlements legisilation". Happy reading.

 

[lub_mir18]

And what next situation?
1. I am from Slovakia. I am director in UK company since May 2014. I dont have absolute none incomes from UK......I think i dont have to file Self Assessment. Agree?
2. But my partner (also fom Slovakia) is director in UK company 3 years. Absolute none incomes. What with self assessment? Is it necesarry file or no?

 

[john1989]

Next situation? You start your own thread so that it prevents confusion.

 

[lub_mir18]

ok. new thread

 

[MyAccountantOnline]

Not sure I agree with last line. If brother is given shares, receives a dividend then gifts the proceeds back to OP, there's a risk of HMRC challenging the arrangement under settlements legislation.

Thank you I quite agree with you.

The point I was trying to make was that no Income tax would be payable on a genuine gift.

The arrangement being suggested isnt a genuine gift and I should have elaborated.