Self Assessment/ltd Company Director

Potbellypig

I am a director of a Ltd company that takes out a salary and dividends every year. I've a little hobby which I've started selling a few more items of recently (not connected in anyway to the Ltd company). I've had a read on the Gov website to see when I'd need to put a self assessment form in but I'm not sure on the answer. I have an accountant for my Ltd company and the next step is bothering him for info but I thought I'd see if I could find out the answer before that. Anyone have any info on where I stand in this situation please?

Dazed_and_C0nfused

Do you currently complete a Self Assessment return?

Potbellypig

Dazed_and_C0nfused said:

Do you currently complete a Self Assessment return?

The accountant does it all

[Deleted User]

Potbellypig said:

Dazed_and_C0nfused said:

Do you currently complete a Self Assessment return?

The accountant does it all

What is the turnover on the ‘little hobby’ - over £1000?

Dazed_and_C0nfused

Potbellypig said:

Dazed_and_C0nfused said:

Do you currently complete a Self Assessment return?

The accountant does it all

That's a yes then.

In which case you will just need to include the income on your tax return.

If you started trading before 6 April 2022 you will to include details on your 2021:22 return (the one due on 31 January 2023).

If it was after 5 April 2022 you need to include it on your 2022:23 return.

And each subsequent return whilst you continue to trade.

Potbellypig

[Deleted User] said:

Potbellypig said:

Dazed_and_C0nfused said:

Do you currently complete a Self Assessment return?

The accountant does it all

What is the turnover on the ‘little hobby’ - over £1000?

I'm not really sure is the honest answer. I've just made and sold items to friends and family, and to people who my friends and family might have recommended or mentioned me to. A good % of the items I sell will be cash as I'll know the person I'm selling to personally. I'd guess as saying it's getting towards the £1000 mark though.

Dazed_and_C0nfused said:

Potbellypig said:

Dazed_and_C0nfused said:

Do you currently complete a Self Assessment return?

The accountant does it all

That's a yes then.

In which case you will just need to include the income on your tax return.

If you started trading before 6 April 2022 you will to include details on your 2021:22 return (the one due on 31 January 2023).

If it was after 5 April 2022 you need to include it on your 2022:23 return.

And each subsequent return whilst you continue to trade.

That's helpful, thank you.

[Deleted User]

If it’s under £1000 there is no need to declare it. If it’s just over you may consider claiming the trading allowance:

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income

gm0

There is a school of thought that company directors are obliged to file a self assessment. On account of being a Ltd director.
That's what my accountant tells me.

Now before the pile on of disagreement - I realise not everybody accepts that you are meant to/agrees that this is factually true. 

And certainly you are not chased for years if you don't bother and have no other reason to i.e. your IR data doesn't smell of unpaid taxes so you don't get targeted for investigation. 

This based on my spouse as a company director not being chased for years though when I had a particularly picky accountant it got flagged by them so we went back and completed the filings

Annoyingly although my understanding is that it is mandatory.  It is a personal not a company expense if you pay your book keeper to do SA tax preparation and electronic filing

[Deleted User]

Hate to be the starter of any pile on but HMRC formally changed their policy in 2019. In my forty years working in tax it was never compulsory for Directors to file tax returns unless issued with a notice to file and HMRC finally agreed. Perhaps the accountant is not aware of this?

https://www.rossmartin.co.uk/sme-tax-news/3809-hmrc-agree-not-all-directors-have-to-file-a-tax-return