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When does a Company Director need to File a Self-Assessment Tax Return?

Written by Graham Coady

As we reach halfway through the 22nd self-assessment tax return filing season, we still find that some of the most basic questions need a bit of thought before answering. This is especially prevalent when considering the tax obligations of a company director.

How would a company director know if they need to file a self-assessment tax return?

Firstly, it is mandatory for a company director to file a tax return with the HMRC if a return notice has been issued.

Secondly, it is also mandatory for a director to notify the HMRC if they have a liability to tax for a particular year of assessment. This notice must be sent to the HMRC by 5th October following the end of the year assessment. If the HMRC are not notified the director becomes liable to penalties.

However, what if a self-assessment tax return notice has not been issued by the HMRC to a director and they do not have a tax liability?

The HMRC’s online guidance states that a director must send in a return if in the last tax year they were an active director. However, if they were the director of a non-profit organisation, such as a charity, and they did not receive any pay or benefits from being a director they will not be required to complete a tax return.

Discretion is advised however as in some case the HMRC has been known to insist that a director file a self-assessment tax return even though a return notice has not been issued and there is no further tax liability for the year, in accordance with the above guidance.

Our recommendation is for all directors to register for the filing of a self-assessment tax return as we’ve often found that our clients have been entitled to a tax rebate; either from gift aid payments, pension contributions or un-reimbursed travel expenses.

If you are a director and are unsure if you fit the criteria to file a self-assessment tax return or if you have been issued a notice by the HMRC but feel you do not fit the criteria please do not hesitate to contact us at tax@cooperfaure.co.uk





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