Limited Company: Tax Returns Out of Work.

stewoo08

Hello,

I have a limited company, it is only myself who is employed and I am the Director. I am a freelance quantity surveyor and have been running my company for just over a year. I have an accountant who has now asked for my tax return, we estimate that it will be approximately £15k tax return. However I am now out of work and having to eat into my tax fund, which will soon be gone. So I'll be out of work, no fund soon. Whats the best thing to do? Can I get out of paying my tax return altogether? Or do I have to some how find £15k?

Many thanks!

fengirl_2

You would need to self asssess in the ususal way and then come to an arrangement with HMRC about payment of the tax due.

stewoo08

But ultimately I would have to repay the lot, are you saying they may just delay it a while without charging interest.

Many thanks for your reply.

Mikeyorks

Today's budget offers the potential for delaying payment at zero penalty / interest if you enter a payment plan .... but it won't be retrospective to the year you're discussing, I'm afraid.

But you need to file the return (to avoid penalty) and then contact them (prior 28days after the due date) to generate an arrangement to pay .... in order to avoid the 5% surcharge. But they will charge the statutory level (currently very low!) of interest.

silvercar

Do you pay yourself by declaring dividends?

If you do, and you haven't taken all the possible dividends last year, you could keep some in the company and declare them as a dividend this year.

Result will be a saving in tax by splitting your income over 2 financial years. Downside would be that it could effect any benefits you may want to claim.

If you are really completely out of work you could consider closing your company and making yourself redundant, then you could be paid a redundancy payment of upto 30k tax free.

(I'm not an expert, just basing my post on bits I've picked up, so no doubt someone will correct me if any of the above is not possible.)

osagefo

silvercar wrote: »

Do you pay yourself by declaring dividends?

If you do, and you haven't taken all the possible dividends last year, you could keep some in the company and declare them as a dividend this year.

Result will be a saving in tax by splitting your income over 2 financial years. Downside would be that it could effect any benefits you may want to claim.

If you are really completely out of work you could consider closing your company and making yourself redundant, then you could be paid a redundancy payment of upto 30k tax free.

(I'm not an expert, just basing my post on bits I've picked up, so no doubt someone will correct me if any of the above is not possible.)

This is so interesting. You make it sound so easy, I just cannot see how one could avoid paying tax by simply closing down a company and paying redundancy to a director. I am keen to hear from others, tax can be so so complex.

Pennywise

The £30k tax free lump sum on redundancy doesn't work for one man companies - HMRC don't allow it.