Do I have to register for Self assesment

TheCyclingProgrammer

WHA wrote: »

Only if it results in a tax liability. If it's just dividends and you remain under the higher rate threshold, or if you're paid via payroll and tax is deducted under PAYE, then there'd be no outstanding liability, so no requirement to register for self assessment. As said above, there is no law requiring directors to register. The law is just that you have to register if you have untaxed income or are liable to higher rate. Of course, if HMRC tell you to do, you have to complete a tax return, but there's no law compelling you to register or submit tax returns otherwise.

You don't necessarily have to register for self assessment if the income is taxable either.

What you MUST do, legally, is notify HMRC that you have income that is chargeable to tax. They may ask you to register and you may also register voluntarily but for income up to certain thresholds (differing thresholds depending on the type of income) HMRC may be able to collect the additional tax through your tax code as this requires a lot less admin.

TheCyclingProgrammer

Similar story...my wife is a shareholder in my company and receives dividends amounting to just over £10k and she has little other income. I was wrongly advised by my old accountant that she had to register for SA as the dividends as they were over £10k. I've seen other accountants advise this too.

However, if you read the HMRC guidance - which is poorly written - the £10k limit for dividends only actually applies if the dividends are taxable and you want to have the tax on those dividends collected through your tax code and you're already on a PAYE job.

If you're not on PAYE, it clearly states that you only need to register if you have extra income that is taxable and hasn't had the tax deducted at source (i.e. As a result of the basic rate tax credit on dividends).

End result, I now have to do a SA for my wife each year that results in a nil liability.

She would have had to register eventually as she is due to earn enough to make student loan payments this year and it's not that much of a hardship but just another example of unnecessary registration creating more work.

chrismac1

Why HMRC encourage all these nil returns to clog up the already fully stretched system is beyond me, other than it maximises the fines when people move house, fall ill, or just forget to do them on time.

Unfortunately HMRC hire parrots and monkeys from the zoo. So although my average rate is 85% acceptance when I write to request that a client is removed from self-assessment, the parrots and monkeys almost always decline such requests for company directors even where they are drawing no salary or dividends.

Like some posters in this thread, the parrots and monkeys believe the drivel on the HMRC site is actually accurate.

Dr_Teeth

It's always good to see an accountant behaving in a professional manner on these threads.

chrismac1

Dr Teeth, if you look back over the past 5 years this subject comes up again and again. Some of the people posting in this thread that the guy should register for SA already know that it is utter tripe because I have pounded those sorts of daft posts many times over the past few years.

The only reason I am even on this site still is that I want to make sure that the HMRC shills who post this drivel time after time don't succeed in getting hapless taxpayers to make blunders. Like signing up for SA when there is no need to.

zygurat789

chrismac1 wrote: »

Some of the advice on here is utter drivel, zygurat is a regular offender. Far from being prudent to do so, registering for SA when not required is just pure stupid. Whether you do it yourself or hire someone else, you are exposing yourself to the full fining and mucking-up regime of HMRC.

"Fine first and ask questions later." Along with your local council with regard to parking and speeding tickets, HMRC are totally obsessed with finding ever more ways to fine taxpayers.

You already have this risk with the corporation tax, which has additional State fines from Companies House if you file late or not in the right format. Why anyone would want to volunteer for a new series of potential fines is beyond me.

Why anyone would actually advise someone to do so is just plain Dumb with a capital D.

There are lots of things it is not necessary to do like hiring an accountant who must always be upsetting HMRC with his attitude. Always remember it is the taxpayer, not the agent, who will suffer when things go wrong.

chrismac1

In fact I am Mr Nice Guy with HMRC for all initial contacts and the first two letters. If the third letter from HMRC is daft then I get the hobnailed boots on in the spirit of some of the posts above, but without the zoo references. I make it clear that I hold the PERSON I am writing to personally accountable for being silly, and that if I have to go further up the line or outside of HMRC that PERSON's name will feature every time.

This works. 9 times out of 10 that ends the matter. No client of mine has EVER paid ANY fine I have appealed, or given HMRC as much as one penny on tax enquiries where it was clear to me HMRC were out of order, as opposed to the client just having omitted something.

For new posters let me make it clear that when I first qualified in 1991 there is no way I would have been this aggressive with HMRC. Back then HMRC was a professional organisation with local people calling round who understood their local patch well and had a feel for who the decent accountants were compared to the dodgy ones. So no need to be anything other than polite and pleasant.

But today's HMRC are for the most part not suitably qualified and experienced for the jobs they are doing, often 200 or more miles away from my local patch and utterly clueless about the local area, often pretty clueless about UK tax law as some of the threads on this site illustrate.

So Mr. Nice Guy for 2 letters, then strap on the hobnailed boots.

zygurat789

chrismac1 wrote: »

In fact I am Mr Nice Guy with HMRC for all initial contacts and the first two letters. If the third letter from HMRC is daft then I get the hobnailed boots on in the spirit of some of the posts above, but without the zoo references. I make it clear that I hold the PERSON I am writing to personally accountable for being silly, and that if I have to go further up the line or outside of HMRC that PERSON's name will feature every time.

This works. 9 times out of 10 that ends the matter. No client of mine has EVER paid ANY fine I have appealed, or given HMRC as much as one penny on tax enquiries where it was clear to me HMRC were out of order, as opposed to the client just having omitted something.

For new posters let me make it clear that when I first qualified in 1991 there is no way I would have been this aggressive with HMRC. Back then HMRC was a professional organisation with local people calling round who understood their local patch well and had a feel for who the decent accountants were compared to the dodgy ones. So no need to be anything other than polite and pleasant.

But today's HMRC are for the most part not suitably qualified and experienced for the jobs they are doing, often 200 or more miles away from my local patch and utterly clueless about the local area, often pretty clueless about UK tax law as some of the threads on this site illustrate.

So Mr. Nice Guy for 2 letters, then strap on the hobnailed boots.

Perhaps you should try to extend the boundaries of this trait

Atidi

Jem8472 wrote: »

I am just wondering if I have to register for self assessment or if it is an automatic process.

I, with 3 members of my family, started a ltd company to start selling a book. We have done well so far with it but always hoping to expand a bit.

I am one of the four directors and I am not sure if I need to register for self assessment. So far I am not looking to take any money out of the business as there is not enough to take anything and keep the books in order. This is just a side venture I have a full time employed job.

I can't seem to find the answer. Any help would be great.

Thanks.

You don't need to register for SA. As an appointed director, HMRC will pick this up and almost certainly send you a request for one.

Jem8472 wrote: »

Thanks all for putting my mind at ease.

I just saw something about self assessment in a newspaper I was printing last night and it got me thinking if I should be doing one.

Jem

If HMRC ask, then you are obligated to submit a return.

purdyoaten

Atidi wrote: »

You don't need to register for SA. As an appointed director, HMRC will pick this up and almost certainly send you a request for one.


If HMRC ask, then you are obligated to submit a return.

I am sorry but this is bad advice. If you are a director and are required to complete a Self-Assessment tax return it is up to you to inform HMRC. By the time HMRC pick this up, there will be late notification fines, interest etc.

http://www.hmrc.gov.uk/manuals/salfmanual/salf210.htm