cheap accountants - director self assessment

One of the first questions our cheap accountants are asked when a client registers and operates a Limited Company is what about my Self Assessment Tax Return? There is often an automatic assumption that being a Director of a limited company means that a self assessment tax return must be completed and submitted to HMRC.

The above is not always the case and more often than not a self assessment tax return is not required to be submitted. This is for the following reasons:

1. PAYE income is taxed at source during the PAYE process

2. A limited company director is not considered to be self employed for income tax purposes

3. A limited company director is an employee of the limited company

4. Many limited company directors can actually have fairly simple tax matters that do not mandate the submission of a self assessment tax return

Despite the above the following request can override this:

If HMRC request a self assessment tax return to be completed and submitted then there is little choice but to complete and submit the return.

There are a number of reasons why a self assessment tax return must be submitted and this includes:

1. You were genuinely self employed as a sole trader

2. You received £2,500 or more in untaxed income

3. You received interest income of £10,000 or more

4. You generated capital gains

5. You received other taxable benefits from your limited company whilst acting as a director

6. Your income exceeded £50,000 and you or your partner received child benefit

7. Your income exceeded £100,000

If you’re in any doubt about your tax affairs then send an email to for expert advice on all tax matters.