Are others completing form SA1 for directors even where the facts are there is no requirment under the Taxes Management Act? What is best practice? I note that In the past it seemed HMRC issued Returns following completion of the CT41g but since last year that doesn't appear to be the case.
I understand that once issued with a return you are obliged to complete one so If HMRC wanted a return for all directors presumably they would have left the system as it was.
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Why?
Why on earth would you register someone for the chore of completing annual self-assessment tax returns "where the facts are there is no requirment under the Taxes Management Act", unless you are just trying to increase your fee income?
Yes - if a tax return is issued, you must complete and submit it.
Directors
http://www.hmrc.gov.uk/sa/need-tax-return.htm
"You must complete a return if you're any of the following:
a company director (unless you're a director of a non-profit organisation, for example a charity, and don't receive any payments or benefits)a minister of religion (any faith)a name or member of Lloyd's"
Not always
I've had HMRC say that some company directors don't have to complete a tax return so in that case I wouldn't - unless there was good reason to do so.
What about penalties?
We have several directors who do not prepare tax returns but obviously if they had tax to pay we would send a return in .
With 2010/11 returns now getting an automatic penalty for late submission regardless of tax liability we were considering whether SA1's should be submitted for all directors.
If as above legislation does not require it then we probably won't , could someone please point to the relevant section in TMA.
S.7 TMA 1970 Notice of liability to income tax and capital gains
I cannot find an updated version online, but s.7(1)TMA 1970 says:
"Every person who -
(a) is chargeable to income tax or capital gains tax for any year of assessment, and
(b) has not received a notice under s.8 ... requiring a return for that year ...,
shall, ..., within six months of the end of that year, give notice to an officer of the Board that he is so chargeable."
There are exceptions for sources of income taxed under PAYE and income taxed at source and dividends if not liable at a higher rate.
Directors receiving minimal salaries do not even meet the requirements of s.7(1). Directors receiving salaries, dividends, etc., within the basic rate band are covered by the exceptions.