Director's Tax Return

Dottie
Dottie Registered Posts: 99 Regular contributor ⭐
in General accounting discussion
Is it a requirement that all directors complete a tax return? I have a director who has never been asked to copmplete one and there would be no tax liability if he did, but just having one of those moments!

Thanks Dottie

Comments

  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    If he's not been asked to do one, and he has no tax liability, no he doesn't have to.
  • Gillian
    Gillian Registered Posts: 17 Dedicated contributor 🦉
    According to this on HMRC http://www.hmrc.gov.uk/sa/need-tax-return.htm you do have to register for Self Assessment as a director
    But I had a new client who registered when he first became a director as it suggests but didnt receive any dividends or income from the business so HMRC told him he didnt need to do one and deregistered him
    We have had to reregister now as he will have dividends and income this year. When he did so they told him that he should have done one for the next 3 years and are requesting that he completes the missing returns.
    This is a bit worrying as if a director doesn't complete one and say in a few years needs to complete one (due to income received from the Limited Company) will the HMRC suddenly expect one to be completed and as they will not have been completed will they be imposing penalties and fines?
  • Anne Boleyn
    Anne Boleyn Registered Posts: 196 Dedicated contributor 🦉
    Director tax return

    Hi
    This is often asked on AccountingWeb and I have pasted relevants links below.

    http://www.accountingweb.co.uk/anyanswers/question/directors-tax-returns-and-penalties

    http://www.accountingweb.co.uk/anyanswers/question/tax-returns-directors

    http://www.accountingweb.co.uk/anyanswers/question/self-assessment-0#comment-521843

    Hope this helps
  • burg
    burg Registered, Moderator Posts: 1,438 mod
    HMRC have their own rules which state that they require a Tax Return if you are a company director. However there is no tax law to back this up. It is therefore up to HMRC to request one.

    Should the director have a tax liability to declare or HMRC request them to file one then one must be filed. Otherwise not.
    Regards,

    Burg
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    burg wrote: »
    HMRC have their own rules which state that they require a Tax Return if you are a company director. However there is no tax law to back this up. It is therefore up to HMRC to request one.

    Should the director have a tax liability to declare or HMRC request them to file one then one must be filed. Otherwise not.

    100% correct.

    This is a timely reminder folks not to rely on advice on HMRC website, as that's just their interpretation of the law and they do get it wrong. ;)

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