HMRC self assesment, possibly overdue?
Discussion
Hi all. I started a company in Aug 2012.
I have not done any self-assessment, nor have I been reminded to.
I have also started a full time job in Feb 2013 to present time.
I did file companies house accounts and returns.
I have not paid myself any dividends, though did reimburse myself for ad-hoc things that were easier to pay for on personal account (such as skype line rental and website build cost through paypal).
I'd say the reason for not doing self-assessment is laziness and ignorance largely, but the other subject on here made me realise that ignorance is not bliss when it comes to HMRC related stuff.
Where do I stand now then?
I have not done any self-assessment, nor have I been reminded to.
I have also started a full time job in Feb 2013 to present time.
I did file companies house accounts and returns.
I have not paid myself any dividends, though did reimburse myself for ad-hoc things that were easier to pay for on personal account (such as skype line rental and website build cost through paypal).
I'd say the reason for not doing self-assessment is laziness and ignorance largely, but the other subject on here made me realise that ignorance is not bliss when it comes to HMRC related stuff.
Where do I stand now then?
You're a year late for 12-13 and 2 months late for 13-14.
be careful with what you bill to the business, there are rules. I'm sure Eric will come and tell you off shortly.
Edit: Fines are fairly hefty for 12/13 as it's been so long. Using their calculator, a £10k tax bill, results in £3800 in fees!
Your penalty for sending the return late £2,000
What you said your tax bill was £10,000
Interest added for paying your bill late £323.01
Penalty for paying your bill late £1,500
Estimate of the total you owe £13,823
be careful with what you bill to the business, there are rules. I'm sure Eric will come and tell you off shortly.
Edit: Fines are fairly hefty for 12/13 as it's been so long. Using their calculator, a £10k tax bill, results in £3800 in fees!
Your penalty for sending the return late £2,000
What you said your tax bill was £10,000
Interest added for paying your bill late £323.01
Penalty for paying your bill late £1,500
Estimate of the total you owe £13,823
illmonkey said:
You're a year late for 12-13 and 2 months late for 13-14.
be careful with what you bill to the business, there are rules. I'm sure Eric will come and tell you off shortly.
Edit: Fines are fairly hefty for 12/13 as it's been so long. Using their calculator, a £10k tax bill, results in £3800 in fees!
Your penalty for sending the return late £2,000
What you said your tax bill was £10,000
Interest added for paying your bill late £323.01
Penalty for paying your bill late £1,500
Estimate of the total you owe £13,823
I think I may have just shat myself...be careful with what you bill to the business, there are rules. I'm sure Eric will come and tell you off shortly.
Edit: Fines are fairly hefty for 12/13 as it's been so long. Using their calculator, a £10k tax bill, results in £3800 in fees!
Your penalty for sending the return late £2,000
What you said your tax bill was £10,000
Interest added for paying your bill late £323.01
Penalty for paying your bill late £1,500
Estimate of the total you owe £13,823
Any positive possibilities you can think of?
Also could you clarify on how you arrived at "What you said your tax bill was £10,000" please?
thanks
P.S. off to have a smoke and mull over how nice the Coq D'Argent roof terrace must be this time of the year..
Edited by isee on Monday 9th March 10:23
isee said:
illmonkey said:
You're a year late for 12-13 and 2 months late for 13-14.
be careful with what you bill to the business, there are rules. I'm sure Eric will come and tell you off shortly.
Edit: Fines are fairly hefty for 12/13 as it's been so long. Using their calculator, a £10k tax bill, results in £3800 in fees!
Your penalty for sending the return late £2,000
What you said your tax bill was £10,000
Interest added for paying your bill late £323.01
Penalty for paying your bill late £1,500
Estimate of the total you owe £13,823
I think I may have just shat myself...be careful with what you bill to the business, there are rules. I'm sure Eric will come and tell you off shortly.
Edit: Fines are fairly hefty for 12/13 as it's been so long. Using their calculator, a £10k tax bill, results in £3800 in fees!
Your penalty for sending the return late £2,000
What you said your tax bill was £10,000
Interest added for paying your bill late £323.01
Penalty for paying your bill late £1,500
Estimate of the total you owe £13,823
Any positive possibilities you can think of?
Also could you clarify on how you arrived at "What you said your tax bill was £10,000" please?
thanks
I just used a round figure. I don't know if it's scaleable or fixed prices either.
Speak to an accountant - you should have done self-assessment personal income tax returns but, based on what you said, the only money you have taken from the company is to reimburse expenses. That shouldn't give rise to personal tax liability - but speak to an accountant pronto!
A more important question is did you do anything about corporation tax in the business? If you have filed company accounts you should have done - that might be a bigger problem as, from what you say, I'd be surprised if there is personal tax to pay (though you should still have done a personal return - directors have to whether or not they have income from the business)
A more important question is did you do anything about corporation tax in the business? If you have filed company accounts you should have done - that might be a bigger problem as, from what you say, I'd be surprised if there is personal tax to pay (though you should still have done a personal return - directors have to whether or not they have income from the business)
oop north said:
Speak to an accountant - you should have done self-assessment personal income tax returns but, based on what you said, the only money you have taken from the company is to reimburse expenses. That shouldn't give rise to personal tax liability - but speak to an accountant pronto!
A more important question is did you do anything about corporation tax in the business? If you have filed company accounts you should have done - that might be a bigger problem as, from what you say, I'd be surprised if there is personal tax to pay (though you should still have done a personal return - directors have to whether or not they have income from the business)
Yes corporation tax is up to date.A more important question is did you do anything about corporation tax in the business? If you have filed company accounts you should have done - that might be a bigger problem as, from what you say, I'd be surprised if there is personal tax to pay (though you should still have done a personal return - directors have to whether or not they have income from the business)
And yes you got it spot on, I haven't paid myself anything (the company is barely ticking over and is more my stubbornness to quit than a successful biz) as I have a decent paying full time job.
I'd be surprised if there is anything to pay, but fully agree that I should have filed a return regardless as per the rules. Though it doesn't help that no reminder or request has been issued by HMRC, so despite the massive time lag, I am actually being proactive here believe it or not.
Will speak to an accountant today though as per the advice, thanks for your input everyone.
Why do you think that you should have completed a Self Assessment tax return?
Despite what you might think, being a director of your own limited company DOES NOT automatically oblige you to register for Self Assessment.
A person only needs to register for Self Assessment when they have personal income during the tax year that will not have been taxed correctly (or at all) by any of the automatic tax deduction at source systems that exist (PAYE, tax deducted on bank interest etc).
You MAY have been required to complete a Self Assessment tax return, but you need to check out your overall personal tax liability situation for the relevant tax years to see if you have a problem or not.
Despite what you might think, being a director of your own limited company DOES NOT automatically oblige you to register for Self Assessment.
A person only needs to register for Self Assessment when they have personal income during the tax year that will not have been taxed correctly (or at all) by any of the automatic tax deduction at source systems that exist (PAYE, tax deducted on bank interest etc).
You MAY have been required to complete a Self Assessment tax return, but you need to check out your overall personal tax liability situation for the relevant tax years to see if you have a problem or not.
Eric Mc said:
Why do you think that you should have completed a Self Assessment tax return?
Despite what you might think, being a director of your own limited company DOES NOT automatically oblige you to register for Self Assessment.
A person only needs to register for Self Assessment when they have personal income during the tax year that will not have been taxed correctly (or at all) by any of the automatic tax deduction at source systems that exist (PAYE, tax deducted on bank interest etc).
You MAY have been required to complete a Self Assessment tax return, but you need to check out your overall personal tax liability situation for the relevant tax years to see if you have a problem or not.
I literally just registered with HMRC to get my UTR.Despite what you might think, being a director of your own limited company DOES NOT automatically oblige you to register for Self Assessment.
A person only needs to register for Self Assessment when they have personal income during the tax year that will not have been taxed correctly (or at all) by any of the automatic tax deduction at source systems that exist (PAYE, tax deducted on bank interest etc).
You MAY have been required to complete a Self Assessment tax return, but you need to check out your overall personal tax liability situation for the relevant tax years to see if you have a problem or not.
What you say Eric is a welcome thing. I strongly believe I have been correctly taxed so far through my full-time job and that there is nothing to pay the government from being a director.
Spoke to our resident accountant at my company and he doesn't seem too bothered by it either even if I did have to pay something, the fact that I am coming to them first would count for a lot (even if they were chasing me at my old address, which is unlikely since I last moved 3 years ago today). so filed for a UTR.
If HMRC HAS written to you telling you you needed to complete a Self Assessment tax return, then you would be obliged to complete and submit it.
If they wrote to you but to an incorrect address, legally, you are still expected to have completed the return BUT you can use the fact that they sent it to the wrong address as a reasonable excuse to try and escape any penalties they might charge. Of course, that appeal would work best if you had notified HMRC on the change of address AND you had documentary evidence to prove that you had contacted them.
Based on what you are saying, HMRC did not seem to have any record that they were asking you to complete a tax return. If that is the case, now that you HAVE notified them that you need to complete a return, the first return they MAY ask you to complete would be the return for tax year 2014/15.
If they ask you to complete and submit any earlier tax year returns (2012/13 or 2013/14) you would need to get them completed and subnmitted within 90 days of the issue of the Notice to Make a Tax Return.
If they wrote to you but to an incorrect address, legally, you are still expected to have completed the return BUT you can use the fact that they sent it to the wrong address as a reasonable excuse to try and escape any penalties they might charge. Of course, that appeal would work best if you had notified HMRC on the change of address AND you had documentary evidence to prove that you had contacted them.
Based on what you are saying, HMRC did not seem to have any record that they were asking you to complete a tax return. If that is the case, now that you HAVE notified them that you need to complete a return, the first return they MAY ask you to complete would be the return for tax year 2014/15.
If they ask you to complete and submit any earlier tax year returns (2012/13 or 2013/14) you would need to get them completed and subnmitted within 90 days of the issue of the Notice to Make a Tax Return.
Eric Mc said:
If HMRC HAS written to you telling you you needed to complete a Self Assessment tax return, then you would be obliged to complete and submit it.
If they wrote to you but to an incorrect address, legally, you are still expected to have completed the return BUT you can use the fact that they sent it to the wrong address as a reasonable excuse to try and escape any penalties they might charge. Of course, that appeal would work best if you had notified HMRC on the change of address AND you had documentary evidence to prove that you had contacted them.
Based on what you are saying, HMRC did not seem to have any record that they were asking you to complete a tax return. If that is the case, now that you HAVE notified them that you need to complete a return, the first return they MAY ask you to complete would be the return for tax year 2014/15.
If they ask you to complete and submit any earlier tax year returns (2012/13 or 2013/14) you would need to get them completed and subnmitted within 90 days of the issue of the Notice to Make a Tax Return.
Thanks Eric, what I said above is all true, i am not trying to spin anything here, though I cannot guarantee that they haven't been sending stuff to my old address, I would have thought they'd look me up through my PAYE by now if I was ignoring them for over a year.If they wrote to you but to an incorrect address, legally, you are still expected to have completed the return BUT you can use the fact that they sent it to the wrong address as a reasonable excuse to try and escape any penalties they might charge. Of course, that appeal would work best if you had notified HMRC on the change of address AND you had documentary evidence to prove that you had contacted them.
Based on what you are saying, HMRC did not seem to have any record that they were asking you to complete a tax return. If that is the case, now that you HAVE notified them that you need to complete a return, the first return they MAY ask you to complete would be the return for tax year 2014/15.
If they ask you to complete and submit any earlier tax year returns (2012/13 or 2013/14) you would need to get them completed and subnmitted within 90 days of the issue of the Notice to Make a Tax Return.
Will update once I hear from them.
Thanks again for the very helpful response.
HMRC's website is very misleading on this. The wording they use makes it sound like you SHOULD register for Self Assessment as soon as you become a director. The actual tax law says no such thing. If a director receives all his income in the form of salary and the tax collected on his income is calculated correctly using PAYE and other methods - then self assessment is not necessary.
HOWEVER, a large number of directors (i.e. MOST) will also be shareholders of their own company and most probably will also be extracting money in the form of dividends. If that is the case (ESPECIALLY if they are Higher Rate Taxpayers) then it is almost a certainty that they will need to complete Self Assessment tax returns.
HOWEVER, a large number of directors (i.e. MOST) will also be shareholders of their own company and most probably will also be extracting money in the form of dividends. If that is the case (ESPECIALLY if they are Higher Rate Taxpayers) then it is almost a certainty that they will need to complete Self Assessment tax returns.
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