Surprised! No Self Assessment for Company Directors

[Dan_Kesher]

My accountant recently showed me this from the Association of Chartered Certified Accountants.

There is no specific requirement in TMA 1970 for a director to register for self assessment if there is no further tax liability for the year and buried within HMRC’s Manuals at EM4551, there is some further guidance:

“There is no requirement to notify chargeability where there is no liability to Income Tax or Capital Gains Tax or where sufficient tax has been deducted at source to meet the net liability for the year.”
There is no exception to this for directors.

Therefore, if a director of a company has no further tax liability for a tax year AND no self assessment tax return has been issued by HMRC, then there is NO requirement for the director to notify chargeability OR file a tax return with HMRC for the year in question.

from http://www2.accaglobal.com/uk/members/technical/advice_support/tax/income_tax/IT2012/directorssa

HMRC of course deny the accuracy of the above information when I tried to deregister for selfassessment.
Has anyone seen this before and managed to deregister?

 

[kevin.doran]

The above is correct. I believe the HMRC site says to the contrary but it is wrong believe it or not.

 

[Ola1]

The ACCA are correct, however if they have already requested a tax return from you, they will be expecting you to fill one in.

Perhaps you need to show them that you're not a higher rate tax payer, you're not going to be getting dividends, and are not going to award yourself benefits in kind from a company under your control,,

might be hard,

But some else might chip in with more info shortly

 

[Dan_Kesher]

The ACCA are correct, however if they have already requested a tax return from you, they will be expecting you to fill one in.

Agreed. If I have to complete any that i've received.

However, I should be able to deregister for future returns.

Second call to HMRC didn't help. Got the same answer. They have to follow a set script and arent allowed to think for themselves.

Going to put it in writing now that more people agree with the ACCAs article and see where I get.
Don't want to do paperwork that I dont have to!

 

[kevin.doran]

I always put SA closures in writing to HMRC anyway and I've never had one challenged to date.

 

[Ola1]

for active directors too ?

As opposed to leaving self employment or retirees

 

[kevin.doran]

for active directors too ?

As opposed to leaving self employment or retirees

Did one only last month and had the standard letter back from HMRC a few days ago confirming the record was now closed.

I've not closed off many directors full stop mind you so that could well have been a stroke of luck.

 

[David Griffiths]

However, I should be able to deregister for future returns.

Don't bank on it. Although there is no legal imperative for directors to register for self assessment, HMRC are perfectly entitled to send a form to anybody, and if they do it must be filled in. It's quite rare for them to take serving directors off the list even if fully taxed at source.

If they decide to keep you on the list, on the list you will stay and there is nothing that you can do about it.