A client is a company director, has been since 2002. Has never been asked by HMRC to prepare a Self Assessment tax return. However through dividend strategy and avoiding going into Higher Rate tax, he has always avoided any actual liability to tax during these years.
He is now wishing to remortgagae and would like to register for Self Assessment from 2015/16 (2016/17 he will have to anyway because of the new dividend tax to declare), so that he can validate his income to mortgage companies with the classic HMRC SA302.
Because HMRC have not actually requested he complete a tax return and because he has not actually had a liability to tax in the year to 2016, is there still a possibility of penalty due to the fact that he is a company director and should have been completing a return regardless of tax liability? What would be the current penalty position?
Hope this makes sense !