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is a director required to complete a Tax Return?

I am having an argument with HMRC! A client registered for self assessment as they were starting self employment. they then met with me and the business was incorporated. Initially, the profits will be low and there will be no salary or dividends for a couple of years. So I asked HMRC to take the taxpayer out of self assessment. HMRC refuse to quoting their manual SIM100050. I understand that this is just their interpretation rather than the law. but what can I do to persuade HMRC that they are wrong? doing a tax return will take less than one hour, but it is the principle of the matter. SIM100050 says:

DIR - other than exempt directors. There are some directorships where tax returns do not need to be completed for the reason of the directorship alone. Provided that their tax affairs do not otherwise require completion, returns will not be required from directors of companies which are set up for charitable purposes, or that are neither profit making nor trading and that do not make payments in any way or provide any company benefits for the directors.


Directors of Community Amateur Sports Clubs (CASC)

Directors of companies set up by tenants to manage freeholds

Nominal directorships (for example school governors)

Where they otherwise qualify to do so, based on other income and amounts, relevant directors can complete a Short Tax Return (SA200) rather than a Main Tax Return (SA100)


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By Chris Mann
12th Oct 2017 14:17

With the greatest respect, this topic has almost had the pips squeezed from it.

I'd suggest a search, within Aweb, might provide some answers. There's even a reference, i believe, earlier today.

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By mrme89
12th Oct 2017 14:23

I do not believe that they have any obligation to take your client out of self assessment.

Your client entered the system, and now they are in it, and are acting as a director, they are going to find it impossible for HMRC to take them out of self assessment.

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12th Oct 2017 14:24


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12th Oct 2017 14:38

They are not required to, but HMRC are allowed to ask for a tax return from anyone.

Since withdrawal of a return is then entirely at their discretion, it's a point of principle that won't get you anywhere.

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By Matrix
12th Oct 2017 15:07

Are you sure you incorporation was the best advice if the business is not going to make profits for a few years?

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to Matrix
12th Oct 2017 15:14

perhaps not, but there are other reasons for the incorporation

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to essex accountant
12th Oct 2017 15:20

That should be possibly not.

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