HMRC’s guidance now states that where all of a director’s income is taxed at source and there is no further tax to pay, they do not have to register for and file a self-assessment return.
As many company directors are taxed under PAYE they will not need to give notice of liability to tax.
If they have received a notice to file a return and have no other taxable income to report, they can ask for the notice to file to be withdrawn. If however HMRC decide that they still require a return then one must be submitted or late filing penalties may be due.
If a director receives dividends, has any untaxed income, any capital gains, or any tax liability for any other reason they will be required to complete a self assessment tax return whether HMRC have asked for one or not.
As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like detailed specific advice please contact us.