Directors Tax Returns

HMRC say that it is necessary for a company director to file a self assessment tax return. The guidance issued by HMRC says that a company director should submit a tax return each year without prompt from them. They may impose a penalty for a late tax return.

Following a recent tax case ( M Kadhem TC5929 ) this guidance is not correct. The judge in the Tribunal case said that the guidance issued by HMRC which stated ” as a director of a limited company you must……register for self assessment……and send a personal self assessment tax return “, did not have the force of law and a taxpayer was not obliged to follow it.

Consequently, where there is no tax liability arising, an appeal should be submitted against any late penalty notices issued by HMRC for a late tax return, simply because you were a company director.

Auto Enrolment Update

As from 1st October 2017 there is no longer a staging date for auto enrolment purposes. Where a new PAYE scheme is set up after this date, then the employer’s legal duties with regards auto enrolment start immediately from the first pay date for employees.

It is still possible to postpone the employer’s duties for a period of 3 months from the start of employment.

For all new employers we would strongly recommend that you seek professional advice on the subject of auto enrolment to avoid potential penalties.