So who HAS to do a SA?
Discussion
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.
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
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
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
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
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).
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).
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 :sIf 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).
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