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Director’s and personal tax returns


13th June 2019

For years HMRC insisted that a director must register for self-assessment and complete a tax return even if there was no income to report.  This was not a legal requirement, but an HMRC imposed requirement!  In 2015/16 at a First Tier Tribunal (FTT) the judge said that no one has a statutory obligation to do anything in relation to income tax simply because they are a director of a company that is not a not-for profit company!  Being a director per se does not entitle a person to dividends.  The tribunal concluded that if dividends received from the company of which a person is a director were to generate an income tax liability, then there is a duty to notify HMRC of the chargeability to income tax but not because of being a director! 

Finally HMRC have amended their guidance to say that a director does not have to complete a tax return simply by being a director as long as their income is below £50,000 and they have no other taxable income.

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