O/T: income tax question for company directors

[Optimistic Nick]

Hi all

I know someone who is, technically, a company director. The company is non-trading and it has never traded. His only income is taxed at source through PAYE. This has always been the case and always will be.

The question is: does he have to file an income tax return? HMRC has confirmed that he does not need to file a corporation tax return as the company does not trade, but does the fact that he is a director mean that he has to file an income tax return? HMRC are aware of his directorship and he's not received any request from HMRC to file a return. Nor has he registered for self assessment.

If he does have to file a return, is it still practically possible to do so in time? And what are the penalties if he fails to do so by 31 Jan? I thought income tax penalties were tax-geared now and as there is no late payment/non-declaration of taxable income here, I don't see that a penalty is even possible?

Thanks

Yes he does need to file an sa100. Rules are different for income tax and Corp tax.

There is an automatic penalty for non compliance with daily penalties applied if the return is not filed within 3 months of the due date. If hmrc haven't issued a notice to file then you will have 3 months from the date of registration to file the return.

You are supposed to register by 5th October following the end of the tax year and any paper return has to be submitted by 31st October or else it's an e return by 31st January.

Hmrc no longer allow penalties to be waived in the case of nil returns so make sure you file it. Google SA1, complete and send to hmrc.

Edit: if the company does start to trade you will need to complete a CT41G informing hmrc that the company is no longer dormant. Failure to comply results in severe penalties.

Accounts need to be filed with companies house whether the company has traded or not

[Elysium]

Hi all

Maybe I'm wrong but I thought you were an accountant?

[Optimistic Nick]

Hi all

I know someone who is, technically, a company director. The company is non-trading and it has never traded. His only income is taxed at source through PAYE. This has always been the case and always will be.

And I really appreciate the help - thanks Feedback!

[Elysium]

Hi all

I know someone who is, technically, a company director. The company is non-trading and it has never traded. His only income is taxed at source through PAYE. This has always been the case and always will be.

The question is: does he have to file an income tax return? HMRC has confirmed that he does not need to file a corporation tax return as the company does not trade, but does the fact that he is a director mean that he has to file an income tax return? HMRC are aware of his directorship and he's not received any request from HMRC to file a return. Nor has he registered for self assessment.

Ok. No problems. Thanks for clarifying that.

[Optimistic Nick]

Yes he does need to file an sa100. Rules are different for income tax and Corp tax.

It looks like he was supposed to register himself for self assessment by 5 October. As far as I can tell there are only penalties for failure to actually file the return, so as long as he does this online by 31 Jan then there should be no penalties. Is that correct? Thanks!