So who HAS to do a SA?
So who HAS to do a SA?
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Gordon Brown

Original Poster:

11,838 posts

265 months

Sunday 20th January 2008
quotequote all

I couldn't figure out why my daughter hadn't called me asking about her SA as she earns over £40k a year and has done for serveral years. So I called her. Seems she hasn't been asked to complete a SA, ever. She is an employee but has a bit of non PAYE income (about £2k). Should she have had a form, and if she hasn't is she obliged to do a SA anyway?

Anyway, I went to the HRMC web site to get answers to these questions but sadly it is just full of 'please do it online' pages and no basic information readily available on SA, but I did notice that Directors (wuith few exceptions) HAVE to submit a SA irrespective of their earnings? Is that right? In which case my wife had better pul her finger out too and I am guessing oll spouses of limited companies belonging to one man bands not yet scared by the HMRC respopnmse to them losing the artic systems case.

Eric Mc

125,784 posts

295 months

Sunday 20th January 2008
quotequote all
Any UK tax resident who has a source of income which is not taxed correctly (or at all) at source has a statutory obligation to notify the Revenue of this additional income and to pay over any additional tax due on this income. That's the basic law on the matter. If the Revenue send out one of these "you don't need to complete a return" letters the best policy is to ignore the letter - because in following the guidance in the letter you may find that you have committed a criminal offence. If you read on in the letter, you will see that they are basically saying we "think" you "may" not need to complete a letter - but that the onus is on YOU to know whether a return is necessary or not. They will not (and legally cannot) stand by this letter.

People who should complete Self Assessment tax returns are indviduals who:

have self employed/sole trading income

are partners in a partnership

have rental income (including income from overseas properties)

are higher rate tax payers who have income which is taxed at source at basic rate only (e.g. bank interest)

have income from multiple sources which may mean that the wronmg PAYE codings are being applied - pensioners often fall into this category and as a result often receive tax refunds

those who want to make additional Higher Rate Claims for pension contributions, charitable donations, special investments (such as investments in Enterprise Investment Schemes)

those with reportable Taxable Capital Gains in the year

directors of limited companies



Edited by Eric Mc on Sunday 20th January 12:16

Gordon Brown

Original Poster:

11,838 posts

265 months

Sunday 20th January 2008
quotequote all
Eric Mc said:
Any UK tax resident who has a source of income which is not taxed correctly (or at all) at source has a statutory obligation to notify the Revenue of this additional income and to pay over any additional tax due on this income. That's the basic law on the matter. If the Revenue send out one of these "you don't need to complete a return" letters the best policy is to ignore the letter - because in following the guidance in the letter you may find that you have committed a criminal offence. If you read on in the letter, you will see that they are basically saying we "think" you "may" not need to complete a letter - but that the onus is on YOU to know whether a return is necessary or not. They will not (and legally cannot) stand by this letter.

People who should complete Self Assessment tax returns are indviduals who:

have self employed/sole trading income

are partners in a partnership

have rental income (including income from overseas properties)Sounds like my daughter and wide should submit then as my wife is a director and my daugter has the odd bits of income/expenditure.

are higher rate tax payers who have income which is taxed at source at basic rate only (e.g. bank interest)

have income from multiple sources which may mean that the wronmg PAYE codings are being applied - pensioners often fall into this category and as a result often receive tax refunds

those who want to make additional Higher Rate Claims for pension contributions, charitable donations, special investments (such as investments in Enterprise Investment Schemes)

those with reportable Taxable Capital Gains in the year

directors of limited companies



Edited by Eric Mc on Sunday 20th January 12:16

Seany88

1,249 posts

250 months

Monday 21st January 2008
quotequote all
Eric Mc said:
directors of limited companies
From what point though? In relation to when the company incorporated?


Eric Mc

125,784 posts

295 months

Monday 21st January 2008
quotequote all
Probably.

I would certainly expect directors to complete SA Returns from when a company starts trading or generating income.

Seany88

1,249 posts

250 months

Wednesday 23rd January 2008
quotequote all
Eric Mc said:
Probably.

I would certainly expect directors to complete SA Returns from when a company starts trading or generating income.
For the year that they incorporated? What if they inc. less than 6mths until the end of the tax year?

Eric Mc

125,784 posts

295 months

Wednesday 23rd January 2008
quotequote all
Certainly if the company actually paid income to the directors/shareholder between the date of incorpoartion and the following 5 April then those directors/shareholders would need to be disclosing that income to the Revenue in some way.

If it was paid under the PAYE system (i.e salaries and wages) then there would be less need for a SA for any individual unless of course the individual was a higher rate taxpayer.

This would mean that the company would have to be registered for PAYE so that it could legitimately deduct and pay over the PAYE/NI arising on such salaries by the statutory due date (19 April).

Even if a director is only reclaiming expenses from the company, that is declareable as part of the PAYE system so the company should ensure it is set up for PAYE by 5 April so that it can make the statutory declarations regarding expenses and benefits (P11d) by the statutory due date for those returns (6 July).

Seany88

1,249 posts

250 months

Thursday 24th January 2008
quotequote all
Eric Mc said:
Certainly if the company actually paid income to the directors/shareholder between the date of incorpoartion and the following 5 April then those directors/shareholders would need to be disclosing that income to the Revenue in some way.

If it was paid under the PAYE system (i.e salaries and wages) then there would be less need for a SA for any individual unless of course the individual was a higher rate taxpayer.

This would mean that the company would have to be registered for PAYE so that it could legitimately deduct and pay over the PAYE/NI arising on such salaries by the statutory due date (19 April).

Even if a director is only reclaiming expenses from the company, that is declareable as part of the PAYE system so the company should ensure it is set up for PAYE by 5 April so that it can make the statutory declarations regarding expenses and benefits (P11d) by the statutory due date for those returns (6 July).
So that's a yes then :s

Eric Mc

125,784 posts

295 months

Thursday 24th January 2008
quotequote all
No, it's a "not necesarilly - but may have to register for PAYE" smile

Seany88

1,249 posts

250 months

Sunday 27th January 2008
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Eric Mc said:
No, it's a "not necesarilly - but may have to register for PAYE" smile
I have very few expenses save for mileage...which is well below what i've drawn out of the company so far! Will be a busy couple of days!

Eric Mc

125,784 posts

295 months

Sunday 27th January 2008
quotequote all
Mileage claims using the 40p/25p per mile claim scheme do not have to be reported on P11ds (or on Self Assessment tax returns).

Reimbursments of other types of expenses do.

Seany88

1,249 posts

250 months

Monday 28th January 2008
quotequote all
Ok, still not got it clear in my head but spoke to my accountant and he says that since I was employed up until July 07 all I had to do was send him my mar07 payslip and P45 form and he would sort out the SA. So i've left it to him to sort. smile already dreading next year...