Unlike company employees, the directors of a company must file their self-assessment tax return in order to calculate the amount of national insurance and income tax they owe. Directors have to register with the HMRC for self-assessment before being able to submit your tax returns.
COMPLAXITIES OF SELF ASSESSMENT TAX RETURN
When it comes to directors of companies, tax calculations can be very different. Private limited companies have a flexible structure enabling NIC and Income tax liabilities for directors to be reduced and this is a significant benefit of this structure rather than being a sole trader. As limited companies can be managed and owned by an individual means that they can not only receive a director’s salary but they can also receive shareholder dividend payments resulting in savings in tax for the individual and the company alike. Self-assessment can be a complex process, especially for company directors who need to calculate their own tax allowances. If you want to be certain that you have claimed the tax relief that you are entitled to and are maximising your income, it is best to seek the advice of a trained accountant from The Accountancy Solutions team. We can ensure your tax return is accurately completed and submitted on time.
Registration for Self Assessment for Directors can be completed over the internet but must take place no later than the 6th October after the end of the 1st tax year during which the company was formed or you became a director. A few days following registration you receive a UTR (Unique Taxpayer Reference) from HMRC which you then use for submitting your tax returns and for paying your NIC and Income tax. You can fill in a paper self-assessment form or an online one, although completing it online means that you benefit from a later deadline.