We recently made a member of the team a company director at Atlas. It’s a simple enough process that can be performed online on the Companies House website. We submitted the forms, received electronic confirmation and then forgot about it.
Recently our incredibly diligent accountant got in touch to advise me that our new director would need to file for self assessment. Hmm, that’s a pain and not something I foresaw. Especially when the director in question is paid via PAYE, so all taxable deductions are made at source. This makes self assessment a paperwork exercise at best.
My first port of call was the HMRC website. A quick Google landed me here: https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return. Keep in mind that this is the government website and so the majority of people would take it at face value. Scroll down and you’ll see this:
Well that’s interesting. We’re not a charity and we pay our directors, so based on this it seems that our new director does indeed have to register for self assessment.
Feeling belligerent I decided to do some further research and discovered that the law has very specific sections about who has to register for self assessment, and it’s not quite in line with the above information. If you’re feeling nerdish like I was, have a read of this Tax Management Act 1970 where it’s outlined quite clearly: http://www.legislation.gov.uk/ukpga/1970/9/section/7/enacted.
Bottom line? Just because you’re a company director does not automatically mean you need to file for self assessment. The only caveat is that if you have tax liabilities you do have to register – but that’s the law regardless of whether you’re a company director.
It was incredibly frustrating to see that what is otherwise a very high quality website is providing incorrect information. The cynic in me wonders if this “oversight” plays in favour of HMRC, as it’s in their interests to have more people file self assessments than not.
I’ve contacted HMRC via their online form to tell them their website is incorrect but frustratingly I’ve not been able to find an e-mail address of somebody who I can speak with to get the site updated.