OnTax Accountants Dunfermline, OnTax, Ask:
Why Should I File A Directors Tax Return?
OnTax Accountants Dunfermline have found that it is mandatory for a company director to file a tax return with HMRC, if a return has been issued or if the director has taken proceeds out of the company. To not file a tax return is a misuse of power for tax benefit and is a crime and may be punishable with a heavy fine and a jail term. OnTax Accountants Dunfermline understands that it is also mandatory for a director (or anybody for that matter) to notify HMRC if they have a liability to tax for a particular year of assessment. OnTax Accountants Dunfermline confirm that they will become liable to penalties, in accordance with Taxes Management Act 1970 (TMA) s7.
No specific requirements are needed for TMA 1970 to apply if a director needs to register for self assessment. There is no need for further tax liability for that year and it is buried within HMRC’s guidelines. Some other steps also need undertaken. OnTax Accountants Dunfermline has found that here is no requirement to notify any change to HMRC where there is no liability to Income Tax or Capital Gains Tax or where sufficient tax has been deducted at source to meet the net liability for the year. OnTax Accountants Dunfermline would say that one must file a tax return only where a tax liability is incurred. We have been made aware of several instances of HMRC staff insisting that a tax return is required for a director even though a return has not been issued and there is no further tax liability for the year. But HMRC's own tax manuals state otherwise. A classic case of don't believe everything you are told by HMRC over the phone!
OnTax Accountants Dunfermline Answer:
File Tax Returns Where Due!
Research says that there is no requirement to notify chargeability where there is no liability to Income Tax or Capital Gains Tax or where sufficient tax has been deducted at source to meet the net liability for the year. OnTax Accountants Dunfermline has found there will be no special rules in such cases as the tax manuals are very clear on this matter. OnTax Accountants Dunfermline thinks that HMRC really could do with clarifying this matter as we get many enquiries about it.
OnTax Accountants Dunfermline Advice:
File Tax Returns On time And Live Stress Free!
As discussed, if the director of a company has no further tax related liabilities for a tax year and no self assessment tax return has been given by HMRC then no tax return is due for submission. OnTax Accountants Dunfermline believes that if HMRC insists on a return in tax due, you should refer them to TMA 1970, s7 agreement and their own guidelines at reference point EM4551. This proves the necessity of tax filing, or not!