The official guidance for Directors is…
As a director of a limited company, you must:
- follow the company’s rules, shown in its articles of association
- keep company records and report changes
- file your accounts and your Company Tax Return
- tell other shareholders if you might personally benefit from a transaction the company makes
- pay Corporation Tax
- register for Self Assessment and send a personal Self Assessment tax return every year
You don’t need to register for Self Assessment or send a tax return if your company is a non-profit organisation (for example, a charity) and you didn’t get any pay or benefits, like a company car.
https://www.gov.uk/running-a-limited-company
https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return
So, basically, if you are a director you must register!
Many accountants think that this one size fits all approach is a little over the top and returns for salaried directors are unnecessary in some cases but the rules are absolutely clear, Directors must register!
So the latest case involving a property company came as a surprise to many accountants
Mohammed Salem Kadhem (case TC05929) became a director of a property company on 21 May 2014. He received no pay or dividends from that company and didn’t register for self-assessment.
Basically HMRC made mistakes in their approach to the case basically arguing that a notice to file had been sent but were unable to prove the notice was sent and Mohammed Salem Kadhem won.
The tribunal accepted that he had a reasonable excuse for filing a late return and all the penalties were quashed.
This doesn’t change the fact that all directors must register and a file self assessment returns. Don’t risk it, its better to file returns!
