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HMRC Agent Update 69

The 'change to the law' in the top article

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Interesting to see HMRC's stance set out in Agent Update 69. 

Self Assessment and Company Directors
Changes to the law on the obligation to notify chargeability to Self Assessment.

HMRC has received enquiries about the law on the obligation to notify chargeability to tax. Guidance on Self Assessment tax returns has been updated on GOV.UK to clarify that company directors with income taxed at source and with no further tax to pay do not need to complete a tax return.
Anyone chargeable to Income Tax or Capital Gains Tax must tell HMRC they are chargeable to tax if they have:
• not received a notice to file a return or
• received a notice to file a return and HMRC have agreed to withdraw the notice.
Information on how to do this is available on the Check if you need to send a Self Assessment tax return webpage on GOV.UK.
There are some exclusions. These include:
• individuals in receipt of a Simple Assessment (unless they are chargeable on anything that is not included in the assessment)
• individuals whose income has been taxed at source
• individuals not liable to the high income child benefit charge.
Many company directors are taxed under PAYE and so will not need to give notice of liability to tax, provided they have no other untaxed income.
HMRC can choose to issue a notice to file an SA return (under section 8 Taxes Management Act 1970) to any individual. Anyone receiving a notice to file a tax
return must do so by the required deadline, or they may be liable to a late filing and/ or a late payment penalty.
If an individual has received a notice to file and has no other taxable income to report, they can ask for the notice to file to be withdrawn. However, HMRC may
decide that they still require a return and if so, the return must be submitted, otherwise penalties may be incurred.

So then. Not actually a change in the law, just what we have all been telling them for years! 


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13th Dec 2018 10:40

It was always a bit of a non-argument for me - unless there was a penalty being charged.

I always liked my directors to be in SA so that I could keep an eye on their personal tax. Dividend tax makes this volte face a bit of a pyrrhic victory, anyway.

So, yes, it's nice. Useful ? Maybe not as useful as it was a few years ago.

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13th Dec 2018 11:44

Strange how this organisation expects individuals to be entirely honourable in their dealings with HMRC but, is completely underhand to infer that "The latest issue has information about the changes to the law for company directors and Self Assessment" when, in reality, HMRC has been forced to alter its guidance!
Makes you wonder who'll be "honoured"within HMRC, come 1st January?

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13th Dec 2018 12:32

I read it this morning, and despite the capitulation, they have still got it wrong.

"HMRC can choose to issue a notice to file an SA return (under section 8 Taxes Management Act 1970) to any individual."

And with regards to the exceptions, an individual may have income chargeable to tax, but because of reliefs have no actual tax to pay, and so does not meet the requirements of S7, though HMRC have conveniently omitted this.

Wrong. S8 TMA gives the reasons that HMRC can issue a notice to file, and none of them are because they feel like it. This recently supported by the FTT.

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