Is your business ready for Brexit? The UK left the European Union on 31 January 2020 and entered a transition period which is due to end on 31 December 2020.
New Rules – Self-Assessment (SA) and Company Directors
If you are a company director with income taxed at source and with no further tax to pay, you no longer need to complete a tax return.
If you are liable to pay Income Tax or Capital Gains Tax you must tell HMRC you are liable to pay tax if you have haven’t received a notice to file a return or have received a notice to file a return but HMRC have withdrawn the notice.
There are some exclusions to this rule. If you are an individual with a Simple Assessment, if you are an individual whose income is taxed at source, or if you are an individual not liable to the high-income child benefit charge.
Many company directors are taxed under PAYE and will not need to give notice of liability to tax, provided you have no other untaxed income. HMRC can choose to issue a notice to file an SA return (under section 8 Taxes Management Act 1970) to any individual. If you receive a notice to file a tax return you must do so by the deadline, or risk a late filing and/ or late payment penalty.
If you have received a notice to file and have no other taxable income to report, you can ask for the notice to file to be withdrawn but HMRC may decide that they still require a return which must then be submitted. Penalties may be incurred if you don’t submit the return.).
(Information from HMRC Agent Update issue 69)