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No P11D without P35?

29th May 2013
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Here's a new one on me.

On 13 April we filed a P11D for a client.

On 17 May HMRC wrote to the client (who received the letter yesterday) to say they couldn't accept the P11D as there was no PAYE scheme. They had therefore re-opened the PAYE scheme, could they first file a P35, then they would be able to re-submit the P11D.

Now, the PAYE scheme had been closed because the company had stopped paying salaries to the directors after 31 March 2012 since they are now in receipt of state pensions, and the company is winding down. Seemed entirely proper. There's still a benefit in kind (and a Class 1A NIC liability) on personal accountancy fees paid by the company, so a P11D is required though.

This all means that there's nothing to declare on a P35. We'll simply submit a nil return with no P14s - but of course the P35 will now be late, so in due course we'll have to then appeal against a late filing penalty! And this is for a return that's not required by law since no salaries have been paid and no tax or NI is due!

The world's gone mad (have I said that before?)!

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Replies (3)

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By ShirleyM
30th May 2013 09:44

Is it worth the cost?

Why can't the directors pay for their personal tax returns?

Could well be cheaper than paying for nil P35's, P11D's, late penalties, etc. 

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Locutus of Borg
By Locutus
30th May 2013 11:45

Exactly, Shirley

I try and avoid P11Ds like the plague. Any personal stuff should go straight to the director's loan account.

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By redman7
30th May 2013 12:36

perhaps

doesn't help you now but perhaps in the future the directors tax returns could be thrown in as a 'freebie' - I'm sure there is a reasonable reason to increase the companies accounting fee....

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