Self assessment

Wendywoo60

My son worked for around 8 weeks  between November 2023 and January 2024 as a delivery driver but was asked to register as a limited company.
His gross income was approximately £2,500 but with van hire costs he made less than £400 net.
Does he need to complete a self assessment form?
He was employed both before and after in the same tax year and has paid tax on that employment. 
Please advise.

Dazed_and_C0nfused

Wendywoo60 said:

My son worked for around 8 weeks  between November 2023 and January 2024 as a delivery driver but was asked to register as a limited company.
His gross income was approximately £2,500 but with van hire costs he made less than £400 net.
Does he need to complete a self assessment form?
He was employed both before and after in the same tax year and has paid tax on that employment. 
Please advise.

Did he register a limited company?

If so what remuneration did he take from the company?  Did he register as an employer and file Real Time Information reports?

Wendywoo60

Yes, he registered as a limited company. 
As I mentioned he only made a profit of £400 before wrapping up the Company.
His paperwork regarding VAT returns ( which were nil) have been filed. 
He is unclear as to the self assessment as we read that you need to have earned £1000 before self assessment required.

Dazed_and_C0nfused

Wendywoo60 said:

Yes, he registered as a limited company. 
As I mentioned he only made a profit of £400 before wrapping up the Company.
His paperwork regarding VAT returns ( which were nil) have been filed. 
He is unclear as to the self assessment as we read that you need to have earned £1000 before self assessment required.

You seem to be confusing Self Assessment (a tax return) and self employment.

But from what you have posted he wasn't self employed.  

What happened to the £400?

Wendywoo60

As a self employed person he has to complete a self assessment tax return,  no???
I don't think I have confused the two!!

Wendywoo60

He was self employed - that's where the Limited Company comes in !

Dazed_and_C0nfused

Wendywoo60 said:

As a self employed person he has to complete a self assessment tax return,  no???
I don't think I have confused the two!!

You haven't mentioned him being self employed though.

You said he registered a limited company, which is totally different to being self employed.

Wendywoo60

Ok, thanks 

Marcon

Wendywoo60 said:

He was self employed - that's where the Limited Company comes in !

Not if he was working via his own limited company and the company was the contracting party. See https://www.litrg.org.uk/working/limited-companies#:~:text=Company%20directors%20are%20not%20self,director%20of%20a%20limited%20company.
 (in case he encounters this situation again), in particular noting the comments:

Company directors are not self-employed. There is long standing confusion about the difference between self-employment and being a director of a limited company.

When someone has been working on a self-employed basis (that is, as a sole trader) and their business begins to develop, the next step can often be to incorporate and provide their services via a limited company. Once someone begins to work through their own company, they are no longer self-employed, even though they may carry on doing the work in a similar way to the way they have always done.

This means that once you have a limited company, you cannot simply think of your company’s money as your own as you may have done with your business’ money when you were self-employed. You also cannot simply declare your company’s money on your next personal tax return in the same way you would have declared your self-employed earnings. The money belongs to your company – not you – and that changes everything!

How did he get the money out of the company? It matters!

Wendywoo60

Thanks for your help.

DullGreyGuy

Wendywoo60 said:

As a self employed person he has to complete a self assessment tax return,  no???
I don't think I have confused the two!!

A self employed person does have to do a self assessment but you state he was operating via a limited company and so it was his employer not self employed. 

Why were they dealing with VAT on £2,500 revenue? As you say they were VAT registered and they made a profit having a nil return makes no sense. 

Suggest he, who hopefully better understands what he was doing, completes the assessment on https://www.gov.uk/check-if-you-need-tax-return/ to determine if they need to do a self assessment or not. 

If they are equally confused as you then speak to an accountant