New ltd company director

lisyloo

I've recently become a director of my DH's limited company, but I'm not receiving any diretc payment.
My own income is via PAYE.

Does anyone know if I need to inform HMRC now or can I wait until I do my tax return at the end of the tax year (actually they don't let me do a tax return I have to send them a letter to get my income tax correct if my pension/savings have changed - which they always do).

Pennywise

Despite what the HMRC website says (it's wrong!), there's no legal requirement for a director to complete a SA return just because they're a director. You only have to register and complete one if you have untaxed income or if your total income breaches the higher rate threshold (or new rule if you earn over £50k and receive child benefit).

chrismac1

Pennywise is correct, for years now I have advised new company directors not to register for self-assessment unless it is absolutely necessary. At times these people say they've had specific advice from HMRC staff that they need to register.

I say to the clients, next time you get that sort of advice ask the HMRC person to quote the exact section of the Taxes Management Act or similar which requires a limited company director to enter SA, knowing full well that there is no such section.

None of the clients who have been kept outside of SA - even those who are only within basic rate tax by virtue of pension and charitable contributions - have had any letters or other hassles from HMRC. So in my view the HMRC risk is near zero, compared to the certain hassle and risk of HMRC mess-up by being in SA.

lisyloo

You only have to register and complete one if you have untaxed income or if your total income breaches the higher rate threshold

Is this a rule/fact? Can anyone provide a link.

I pay higher rate tax but they point blank refuse to let me do SA for my relatively simple circs (presumably for cost reasons).
They seem unbothered about relatively small amounts but I can't get them to define that.
As it's legally my responsibility to pay the right amount of tax, I send them a letter each year saying

gross pension cotributions are £x
gross savings income is £x
gross charity gift aid if £x
Please recalculate my income tax

Then they either send me a cheque or add any underpayment onto next years tax code.

nomunnofun

lisyloo wrote: »

Is this a rule/fact? Can anyone provide a link.

Actually -only if income is over £100000 when personal allowance starts to be withdrawn.

http://www.hmrc.gov.uk/sa/need-tax-return.htm

lisyloo

Thanks all, very helpful.
I'll inform them after the end of the tax year as I'm not receiving any income from it so it doesn't actually change my financial circs directly.