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.