We always recommend that Directors of Limited Companies do a self assessment return every year and ensure that our clients do so. If you go here:Â https://www.gov.uk/check-if-you-need-a-tax-return and tick the box that you are a Director HMRC will tell you that you need to do so.
However occasionally we take on a Company Client where the Directors for whatever reason haven’t been completing a Self Assessment return. If they have never done so then they need to fill in one of these to obtain a Unique Tax Reference (UTR)Â https://www.gov.uk/government/publications/self-assessment-register-for-self-assessment-and-get-a-tax-return-sa1
Unfortunately on this form you need to state when you became a Director, and if it was say 10 years ago then HMRC are keen on issuing all the intervening Self Assessment forms with associated penalties. Even if the Director only had for example PAYE income that was taxed at source.
HOWEVER:
HMRC are being a bit disingenuous. The law does not say that a Director has to submit a tax return. Indeed this tribunal case https://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j9898/TC05929.pdf has just upheld that fact. A person should submit a self assessment return if they have taxable income or get a notice to file from HMRC.
So whilst we are not going to change our advice on Directors submitting self assessment returns, there is definitely a case for arguing about missed returns that had no taxable income on them.
If you need any help getting your tax affairs in to order please do not hesitate to get in contact.
