Frequently asked questions (FAQ)

  1. Do I have to submit my tax return if registration for self-assessment was submitted, however had no any income during the period?

Yes, you must certainly do, as HMRC has no knowledge at all whereas you had any income or not, until you report the fact.

  1. What exactly I have to do with my self-employed registration if I am leaving United Kingdom for good?

IN case you are leaving the United Kingdom for good and you have traded in the country as a sole trader, you must notify of a change to HMRC when it happens and provide with the address abroad. Two instances must be notified: HMRC and National Insurance department. Once abroad, you have to remember to file your last tax return and provide the date when self-employment activities ceased.

  1. Do I have to fill out self-assessment tax return when I am a company director, However the only income I had was PAYE?

Company Directors’ in the UK must fill out and submit self-assessments tax return each year, despite the nature of their income, until they continue to exercise directorship for any of the UK’s companies.

  1. Will I be entitled to a state pension, when I do submit self-employment tax return each year and pay class 4 National Insurance, however never had any bills for Class 2 National insurance?

In order to qualify for the UK state pension, taxable person working as a sole trader must pay class 4 and class 2 National insurance contributions. Exception applies in some cases.

  1. Will I have to pay tax on Dividends drawn from UK company?

IN general dividends from the UK companies are not taxed as per self-assessment, unless you are a higher tax rate payer. If this is the case, then taxation on dividends comes to 32.5%. All changes after 06/04/2016. Taxable person is given £5,000 per year free of tax dividends allowance and then 7% rate taxation comes into force until you reach the higher rate income threshold. Once this is the case the rate remains the same 32.5%

  1. What is RTI?

It stands for Real Time information and refers directly to reporting to HMRC exactly when things happen or even day before. Currently this system is applied to PAYE wages paid to all company’s employees. It is, Employer must report to HMRC wage payments to all its employee the same day or even a day before.

  1. What is pension regulator?

This is entirely new system developed by government in order to assist people to save more money for their retirement. Every Limited company has a stating date set by Pension regulator and must comply with reports needed.

  1. What returns exactly company must submit?

All UK Limited companies are regulated by HMRC and Companies house. Both institutions must receive returns from trading companies on a yearly basis. HMRC is concerned with any financial reports: Profit loss accounts and Balances sheet. At the same time Company while is trading have to register as a contractor, subcontractor, employer and VAT taxable unit. Depending on them, additional duties to HMRC appears and must be complied with. Company house is concerned with a structure of the company: Company Directors, shareholding and type of business

  1. Must Limited company have Company secretary?

No. Limited company can be opened and trade with only one active Director