Does a director of a CIC need to file a tax return

Does a director of a CIC need to file a tax return

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I have a client which is a Community Interest Company (CIC). This is the only CIC i have.

I wanted to know if the directors of a CIC are obliged to file a personal tax return (as with directors of normal Ltd Co's).

 

Replies (14)

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Stepurhan
By stepurhan
06th Oct 2017 12:26

Regardless of what HMRC may say, no directors are required to file personal tax returns solely for being a director. They have to have reportable income (such as dividends for a director/shareholder) for the requirement to kick in.

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RLI
By lionofludesch
06th Oct 2017 12:35

Arrgh !!

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Replying to lionofludesch:
By Ruddles
06th Oct 2017 12:38

Step on a Lego brick, Lion?

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Replying to Ruddles:
RLI
By lionofludesch
06th Oct 2017 12:42

It's a new twist to a regular question.

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Replying to lionofludesch:
Stepurhan
By stepurhan
06th Oct 2017 12:48

You have to give some credit for the original approach. (then take it away again for saying "as with directors of normal Ltd Co's")

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By Ruddles
06th Oct 2017 12:46

Nicks9991 wrote:
I wanted to know if the directors of a CIC are obliged to file a personal tax return

And what is it that you want to know now?

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Replying to Ruddles:
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By Nicks9991
06th Oct 2017 13:12

I'm not sure what Nicks9991 is all about???

Anyway, I used to adopt the approach and not file a personal tax return for directors just on the basis that they were a director. Which is correct I agree.

However, the headaches this caused me with director clients receiving tax returns but not informing me and then blaming me that I should have been filing this for them. Also calling up HMRC who were telling the clients that I was wrong and "all directors are required to file personal tax returns", was too much (boohoo)

So now I've adopted the approach of filing tax returns for all directors. Anyway most of them receive over £5,000 dividends so are now required to.

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Replying to Nicks9991:
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By Matrix
06th Oct 2017 13:45

Well in that case let your client decide. I understand that there is an HMRC office in Southampton which is sending out historic notices to file to naughty Directors who did not register for SA "on time" and under their "obligations according to gov.uk" (wording per a rejection letter to an appeal).

All of my Director clients are now within SA and the penalty was for one who didn't send me the notices to file or the authorisation code from HMRC. However she was up a small amount since my fees for filing the returns would have been higher than the penalties and I have appealed them again (for free).

Not easy to explain to clients but I always asked them if they had received notices to file and explained why I wasn't registering them.

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Replying to Nicks9991:
By Tim Vane
06th Oct 2017 14:21

Nicks9991 wrote:
Anyway most of them receive over £5,000 dividends so are now required to.

Now you're just being deliberately provocative. In addition to directors not being required to file a tax return, there is also no requirement for somebody with over £5,000 dividends to file a tax return.

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Replying to Tim Vane:
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By Nicks9991
06th Oct 2017 14:41

Tim Vane wrote:

Nicks9991 wrote: Anyway most of them receive over £5,000 dividends so are now required to.

Now you're just being deliberately provocative. In addition to directors not being required to file a tax return, there is also no requirement for somebody with over £5,000 dividends to file a tax return.

OK so if you receive between 5k - 10k in dividends you have the option of asking HMRC to collect the tax via your tax code, but anything over 10k is a definite tax return requirement.

However to avoid awkward conversations (multiple in my experience), I file a return for all Ltd Co directors.

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Replying to Nicks9991:
Portia profile image
By Portia Nina Levin
06th Oct 2017 14:45

Why is a director of a CIC receiving dividends?

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Replying to Nicks9991:
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By Matrix
06th Oct 2017 14:50

If a client calls up HMRC to put tax on dividends in their tax code then it is likely that HMRC will register them for SA from the date of the start of the directorship. We can't call HMRC since we are not agent (unless we submit a 64-8 with a NI number or they have a digital tax account, quite a lot of work for a basic rate taxpayer with a small Ltd).

At least if you register them using SA1 you have some control over when they register for SA.

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Replying to Nicks9991:
Stepurhan
By stepurhan
06th Oct 2017 15:03

Nicks9991 wrote:
So now I've adopted the approach of filing tax returns for all directors.

So why have you asked this question?

A director of a CIC is still a director. Either you file returns for all directors as a precaution or you don't.

In all honesty, this post reads like someone back-pedalling on their (incorrect) statement that directors have to complete tax returns.

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Portia profile image
By Portia Nina Levin
06th Oct 2017 14:07

Of course they bl00dy well do!!

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