My client was a director of a limited company. We act for the company, but not her. However, she has been issued with tax returns for 2011 & 2012 and not mentioned anything to us at all - until recently when she disclosed that she owed tax of £3,300 (penalties and interest) for these two years!
The company is her only tax return income, although it is not doing well. For those years, she had a total salary of £5,000 and no dividends. The only other income she has is WTC and child benefit, which obviously don't go on the tax return.
She resigned as a director of the company in July 2011.
What is the best way of approaching this? I understand that although HMRC say that directors need to submit returns, there is no requirement under S7 of TMA 1970. I imagine if I call HMRC they will just say that the penalties are due - which seems like an expensive technicality.