Do I need to file a tax return?
Discussion
Since March last year I've been contracting under my own limited company. Before that from Oct 07 - Jan 08 I was working under PAYE, and previously from Aug 07 back also under PAYE.
For some reason I've been operating under the belief that I wouldn't need to file a return until later this year (ie for the next tax year) - but I'm now thinking that this might not be the case....
Do I need to file one?
If so, I have a feeling it might be too late to get it all sorted - could I just guesstimate the tax I owe (I guess just for March/ April 08?) and send a cheque to avoid missing the dealine?
For some reason I've been operating under the belief that I wouldn't need to file a return until later this year (ie for the next tax year) - but I'm now thinking that this might not be the case....
Do I need to file one?
If so, I have a feeling it might be too late to get it all sorted - could I just guesstimate the tax I owe (I guess just for March/ April 08?) and send a cheque to avoid missing the dealine?
Most directors of their own companies have to complete SA returns. It depends on how you were remunerated for the entirety of tax year 07/08. If all your income in the year ended 5 April 2008 was
a) basic rate only
b) taxed fully at source under PAYE
then you pronbbbaly won't need to complete one.
If you were a higher rate tax poayer and/or took dividends in 07/08, you might find that you should be completing a return.
a) basic rate only
b) taxed fully at source under PAYE
then you pronbbbaly won't need to complete one.
If you were a higher rate tax poayer and/or took dividends in 07/08, you might find that you should be completing a return.
Neil_H said:
Thanks for the info Eric. I was PAYE up until the end of Jan (I think I was in the higher rate), then self-employed as of March 10th - I did draw from the company between then and April. So I guess I'm going to have to do one - bugger. 
In what way did you draw from the company? In other words, dividend or salary?Eric Mc said:
Neil_H said:
Thanks for the info Eric. I was PAYE up until the end of Jan (I think I was in the higher rate), then self-employed as of March 10th - I did draw from the company between then and April. So I guess I'm going to have to do one - bugger.
In what way did you draw from the company? In other words, dividend or salary?If you draw dividends, then you will definitely need to submit returns. That is the only way the Revenue can get a handle on your tax position as there is no other system by which they can find out about an individual's dividend income.
To be honest, it is pretty much expected that directors of companies submit self-assessment returns - mainly because they are no longer "mere" employees and are, to a certain extent, masters of their own remuneration methods and can, within reason (and legally, of course) manipulate how their income is derived from their own company.
As I said, I don't think you will need to make a return until after 5 April 2009.
To be honest, it is pretty much expected that directors of companies submit self-assessment returns - mainly because they are no longer "mere" employees and are, to a certain extent, masters of their own remuneration methods and can, within reason (and legally, of course) manipulate how their income is derived from their own company.
As I said, I don't think you will need to make a return until after 5 April 2009.
Eric Mc said:
If you draw dividends, then you will definitely need to submit returns. That is the only way the Revenue can get a handle on your tax position as there is no other system by which they can find out about an individual's dividend income.
To be honest, it is pretty much expected that directors of companies submit self-assessment returns - mainly because they are no longer "mere" employees and are, to a certain extent, masters of their own remuneration methods and can, within reason (and legally, of course) manipulate how their income is derived from their own company.
As I said, I don't think you will need to make a return until after 5 April 2009.
Hmm, perhaps I can 'reallocate' what I drew from divident to salary then?To be honest, it is pretty much expected that directors of companies submit self-assessment returns - mainly because they are no longer "mere" employees and are, to a certain extent, masters of their own remuneration methods and can, within reason (and legally, of course) manipulate how their income is derived from their own company.
As I said, I don't think you will need to make a return until after 5 April 2009.
Edited by Neil_H on Wednesday 28th January 09:27
Why?
What's the problem of filling in tax return?
Do you like paying PAYE tax and Employee's AND Employer's NI.
The hassle of filling in a self assessment tax return is far less onerous than paying extra tax and NI.
If you CAN draw dividends (i.e. IR35 is not applicable and the company has sufficient funds) then go ahead and make use of them.
What's the problem of filling in tax return?
Do you like paying PAYE tax and Employee's AND Employer's NI.
The hassle of filling in a self assessment tax return is far less onerous than paying extra tax and NI.
If you CAN draw dividends (i.e. IR35 is not applicable and the company has sufficient funds) then go ahead and make use of them.
Eric Mc said:
Why?
What's the problem of filling in tax return?
Do you like paying PAYE tax and Employee's AND Employer's NI.
The hassle of filling in a self assessment tax return is far less onerous than paying extra tax and NI.
If you CAN draw dividends (i.e. IR35 is not applicable and the company has sufficient funds) then go ahead and make use of them.
It's just laziness, as I only have 3 days to do one for 07-08, but if I don't need to file until after April then it's no problem (I know I will definitely have to do one then).What's the problem of filling in tax return?
Do you like paying PAYE tax and Employee's AND Employer's NI.
The hassle of filling in a self assessment tax return is far less onerous than paying extra tax and NI.
If you CAN draw dividends (i.e. IR35 is not applicable and the company has sufficient funds) then go ahead and make use of them.
I suppose I should take this up with my accountant but he's understandably difficult to pin down at the moment.
Thanks for the advice, Eric
Neil_H said:
Eric Mc said:
Why?
What's the problem of filling in tax return?
Do you like paying PAYE tax and Employee's AND Employer's NI.
The hassle of filling in a self assessment tax return is far less onerous than paying extra tax and NI.
If you CAN draw dividends (i.e. IR35 is not applicable and the company has sufficient funds) then go ahead and make use of them.
It's just laziness, as I only have 3 days to do one for 07-08, but if I don't need to file until after April then it's no problem (I know I will definitely have to do one then).What's the problem of filling in tax return?
Do you like paying PAYE tax and Employee's AND Employer's NI.
The hassle of filling in a self assessment tax return is far less onerous than paying extra tax and NI.
If you CAN draw dividends (i.e. IR35 is not applicable and the company has sufficient funds) then go ahead and make use of them.
I suppose I should take this up with my accountant but he's understandably difficult to pin down at the moment.
Thanks for the advice, Eric
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