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Where Taxpayers and Advisers Meet

Unususal Query

hkb2016
Posts: 2
Joined: Thu May 12, 2016 6:11 pm

Unususal Query

Postby hkb2016 » Thu May 12, 2016 6:29 pm

I have a bit of a strange question as i have been getting different opinions from different people at HMRC.

This is my situation: I did have a limited company from 2010-2014. I was the only Director and I was getting dividends. My accountant filed returns for all the periods except 2012-2013 (he closed down the business and left the country) during which I had received about £40k as dividends. In 2014 I closed down my company as my current work wouldn't allow me to have a registered company in my name. It's only the other day when I was going to apply for my visa I realised that my accountant didn't file the accounts as I couldn't find a CT600 for that period.

Is there anyway I can pay tax on the dividends I claimed during the 2013-2014 period via Self Assessment as my company didn't submit returns? (Someone from HMRC suggested I can and someone else said I can't). Or do I have to reinstate the company, file returns and then do a SA? Basically I want to pay tax to HMRC for the dividends I got from my Limited Company.

Time is of absolute essence here so I would be looking for the fastest route. I do not want to evade any tax and yes I should have checked to make sure my accountant had filed the paperwork on time. But no use with hindsight, I would like some way to resolve this BIG problem.

Many thanks,
Harry

jpcentral
Posts: 924
Joined: Wed Aug 06, 2008 3:28 pm
Location: Loughborough
Contact:

Re: Unususal Query

Postby jpcentral » Fri May 13, 2016 1:13 pm

A few things on your post aren't 100% clear but I think I get the gist.

An individual tax return (SA100) doesn't ask for details of each dividend received. All that has to be entered is a total. You could therefore simply submit an amended (or new SA100) with the dividend (and other income) shown and HMRC will probably accept it, charge you the tax plus interest (and possibly penalties for late submission and payment).

However, I think your bigger problem might be in respect of the company. If your statement that the company didn't file a CT600 (corporation tax return) is correct and you were the only director, you are the person who was responsible for filing the CT600 and ensuring that the correct tax was paid. If the CT600 was not filed and payment made, you could be prosecuted.
John Perry
Central Business Services
Loughborough
http://www.centralbusiness.co.uk

hkb2016
Posts: 2
Joined: Thu May 12, 2016 6:11 pm

Re: Unususal Query

Postby hkb2016 » Fri May 13, 2016 11:52 pm

A few things on your post aren't 100% clear but I think I get the gist.

An individual tax return (SA100) doesn't ask for details of each dividend received. All that has to be entered is a total. You could therefore simply submit an amended (or new SA100) with the dividend (and other income) shown and HMRC will probably accept it, charge you the tax plus interest (and possibly penalties for late submission and payment).

However, I think your bigger problem might be in respect of the company. If your statement that the company didn't file a CT600 (corporation tax return) is correct and you were the only director, you are the person who was responsible for filing the CT600 and ensuring that the correct tax was paid. If the CT600 was not filed and payment made, you could be prosecuted.
Hi John,

Many thanks for your reply. Would I still be liable as an individual even though the company has now been dissolved? I tried to get advice from HMRC but they said since the company doesn't exist I cannot pay any taxes for the company! However I don't want to look like I claimed dividends and didn't pay tax on them hence I'm trying to do it via a self assessment.

cheers,
H

jpcentral
Posts: 924
Joined: Wed Aug 06, 2008 3:28 pm
Location: Loughborough
Contact:

Re: Unususal Query

Postby jpcentral » Sat May 14, 2016 4:28 pm

This gets quite complicated.

If you, as director, allowed the company to be dissolved incorrectly, you can be prosecuted because you didn't fulfil your legal responsibilities.

If the company was dissolved with assets (money or physical assets), which seems quite likely if you were paid legal dividends, what happened to those assets? If you have acquired them, you have misappropriated assets which don't belong to you personally.

Should HMRC or Companies House decide to go down this route, you can be charged with some serious offences. In effect, you appear to have stolen assets.

I'm not saying you have done this deliberately and a great deal is going to depend on the amounts involved. If you had £40,000 in legal dividends that implies a profit in excess of £50,000 and tax of around £10,000.

HMRC have the right to reinstate the company (and charge you around £2,000 for the privilege) then demand the tax from the company. This is unusual but not unknown.

If you want to be absolutely clear you could probably write to HMRC giving them a final CT600 for the company and offering to pay them yourself. If they decline on the grounds that the company has ceased, you are in the clear. We had a similar situation a few years ago and received a nice letter from HMRC saying that, in view of the low amount (around £800) they would write it off and not pursue it further,

I suggest you get an accountant to prepare final accounts and CT600 then write to HMRC.

Or you could just do nothing and HMRC might not ever bother - very likely.
John Perry
Central Business Services
Loughborough
http://www.centralbusiness.co.uk


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