Directors taxed under PAYE not required to file return

HMRC has amended its guidance on self-assessment tax returns to clarify that company directors with income taxed at source under PAYE and with no other tax obligations do not need to complete a tax return.

Anyone chargeable to income tax or capital gains tax must tell HMRC they are chargeable to tax if they have:

• not received a notice to file a return; or
• received a notice to file a return and HMRC has agreed to withdraw the notice.

 Exclusions to this rule include:

• individuals in receipt of a simple assessment unless they are chargeable on anything that is not included in the assessment;
• individuals whose income has been taxed at source; and
• individuals not liable to the high income child benefit charge.

 HMRC can choose to issue a notice to file a self-assessment return under TMA 1970, s 8 to any individual. But if someone who has received a notice to file has no other taxable income to report, they can ask for the notice e to be withdrawn. Many company directors are taxed under PAYE and so will not need to give notice of liability to tax, as long as they have no other untaxed income.

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