The only people required to file a Tax Return are those to whom a notice under S.8 TMA 1970 to deliver a Return has been sent.
Under S.7(1) there is an obligation to give notice of chargeability, but under Ss.7(3)-7(7), notice is not required if, broadly speaking, all the sources of income are liable to tax at source.
Section 7 refers to people who must notify HMRC that they are chargeable to tax.
Section 7(1) says everybody who is chargeable must notify HMRC, but you need to read on beyond that. Section 7(3)
A person shall not be required to give notice under subsection (1) above in respect of a year of assessment if for that year his total income consists of income from sources falling within subsections (4) to (7) below and he has no chargeable gains
If the director only has income which is already fully taxed there is NO need to make a notification under section 7
Company directors do not have to notify HMRC under section 7 simply by virtue of being a company director.
So the HMRC insistence that ALL directors should complete tax return has no foundation in law.
I have one client, who when he set up a Ltd co, automatically got sent a SA notice. I believe Co House pass the information to HMRC, which generated the notice.
If a director does not get a notice to file AND do not have a tax liability they don't have to do a tax return. They will not get in trouble in the future either for not doing it either.
Its only once they have a notice to file that they have to do it.
