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 info@cheaperaccountant.co.uk for expert advice on all tax matters.
