Director - Dividends only - No Self assesment!

Dear all,

I am about to apply for my ILR set(O) on June 6th.

I am showing earnings this time only from one source as salary with payslips from my own company for all the required points. Its very straight forward.

The question I have now is for my previous Tier 1 General extension last time in which I again had only one source of income - as dividends for all the required points from my own company as its director.

My CA advised that I do not require to complete self-assesment as it is not required as the company is paying corporation tax and you did not have any other source of income such as salary or a second job.

My lawyer is also advising me that I dont require self assessment to be completed for the last extension dividends as it was all dividends from the company - so just submit tax summary from CA that all corporation tax are paid or being paid. And a letter from HMRC saying the same for previous years and a letter if there is a payment plan in place with the company.

Please can anyone let me know if the above is rightly advised.

Thanks in advance!!

In one way we do not need it but if you are going for ILR my understanding is you must submit your self assessment. I think its the only area where cw can check your previous earnings. You do not need to pay the tax but you must submit the earnings.

And also I would recommend to fill the self assessment by your accountant and check the values before doing the final submission.

However thats my understanding and take senior members or consultants advise for more details.

I am in a very similar situation as yours with an appointment in the first week of April now. I did consult solicitors and have been following several members on this forum facing issues similar to yours. This is the crux of the issue - HMRC is all right with you not filing Self assessment returns as long as you do not have any other source of income and your dividend is below threshold (no personal taxes owed). But it is a different story in the Home office where they check your employment history and return history. So, you are better off filing it now. You wont be penalised(if you owe no taxes) and it is just a matter of filing a form online (If it is 2011-12 and onwards, it is reflected in the system in 48 hrs. Earlier ones take time). Also, go through a solicitor as this situation might need a nice presentation of the case. And lastly choose Croydon PEO. Case workers there seem to understand these things better.

Yes file SA even though its not required. In your case any PEO/PSC will be fine. There is a link on ACCA website which do tells that you are not required to fill SA under xyz circumstances take that with you and everything will be fine. The manager at liverpool PSC is an accountant and they do intend to understand complex accounting better than other PEO.

One more thing when any PEO/PSC has to take advice on any accounting matters they take it from Liverpool, complex Tier 1 is forwarded to Sheffield, Complex LR and Asylum to Croydon.

Thank you very much guys, yes my ca has done 2010/11 and my 302s are being posted and rest my ca said will be done online. And yes he said he will give me a letter to say no sa was required but still did for visa purposes. Also proof why it was not required.

As a Director of limited company you have to do SA irrespective of amount of dividend you have claimed.

Corporation Tax is company tax affairs

SA is individual tax affair completely unrelated to corporation tax and it shows individuals complete earning in a financial year

Ta
Honey

“There is no requirement to notify chargeability where there is no liability to Income Tax or Capital Gains Tax or where sufficient tax has been deducted at source to meet the net liability for the year.” This is in acca and HMRC website

https://www.gov.uk/self-assessment-tax- ... tax-return

========================================================================================
Who must send a tax return
The tax year is from 6 April to 5 April the following year.

You’ll need to send a tax return if, in the last tax year:

you were self-employed - you can deduct allowable expenses
you got £2,500 or more in untaxed income, eg from renting out a property or savings and investments - contact the helpline if it was less than £2,500
your savings or investment income was £10,000 or more before tax
you made profits from selling things like shares, a second home or other chargeable assets and need to pay Capital Gains Tax
you were a company director - unless it was for a non-profit organisation (eg a charity) and you didn’t get any pay or benefits, like a company car
your income (or your partner’s) was over £50,000 and one of you claimed Child Benefit
you had income from abroad that you needed to pay tax on
you lived abroad and had a UK income
you got dividends from shares and you’re a higher or additional rate taxpayer - but if you don’t need to send a return for any other reason, contact the helpline instead
your income was over £100,000
you were a trustee of a trust or registered pension scheme
you had a P800 from HMRC saying you didn’t pay enough tax last year - and you didn’t pay what you owe through your tax code or with a voluntary payment

=========================================================================================

Also in my opinion an additional important document like SA will not harm your application anyway....

Rest is your wisdom and perception .

Best of Luck

Ta
Honey

First off Im doing it either way but my ca said I didn't need to submit because I was not under higher rate tax and my dividends were under the threshold and tax was deducted at source as CT.

http://www.hmrc.gov.uk/manuals/emmanual/em4551.htm

Just an update. I had a successful ILR application in person in Croydon PEO with a similar case to yours. My advice to you is to do the following in addition to the normal documentation.

1) File all Self assessment returns if not done so from the year of entry until now.
2) Get a letter from accountant stating that you have submitted all returns with the years mentioned clearly and that you did not owe any tax to HMRC though you filed retrospectively. This letter is key is what my solicitor told me.
3) If possible, also get your accountant to mention the rule from HMRC rulebook about it being not mandatory to file returns for directors with Dividend below threshold. (I did not do this by the way)
4) Submit all your SA302, CT600 & employment History that HMRC gives you.
5) Clearly mention in your covering letter that you have done your Self assessment returns retrospectively because you did not realise this earlier as per your accountant's advice. Now that it came to your notice, you fixed the problem and also mention that you did not owe any tax. Being honest and forthright about the issue is better because HO can clearly know about retrospective filings.
6) My solicitor advised me to apply by post - the simple reason being HO getting some clarity and precedence with other cases like this before your case is comes up for consideration. I took the risk but if you have the time and can wait 6 to 7 months of travel documents being held up, do post your application.
7) Go to Croydon PEO if you are applying in person.
Lastly pray that you get a senior case worker looking at your case.

Thank you very much!!

tier1_london wrote:Just an update. I had a successful ILR application in person in Croydon PEO with a similar case to yours. My advice to you is to do the following in addition to the normal documentation.

1) File all Self assessment returns if not done so from the year of entry until now.
2) Get a letter from accountant stating that you have submitted all returns with the years mentioned clearly and that you did not owe any tax to HMRC though you filed retrospectively. This letter is key is what my solicitor told me.
3) If possible, also get your accountant to mention the rule from HMRC rulebook about it being not mandatory to file returns for directors with Dividend below threshold. (I did not do this by the way)
4) Submit all your SA302, CT600 & employment History that HMRC gives you.
5) Clearly mention in your covering letter that you have done your Self assessment returns retrospectively because you did not realise this earlier as per your accountant's advice. Now that it came to your notice, you fixed the problem and also mention that you did not owe any tax. Being honest and forthright about the issue is better because HO can clearly know about retrospective filings.
6) My solicitor advised me to apply by post - the simple reason being HO getting some clarity and precedence with other cases like this before your case is comes up for consideration. I took the risk but if you have the time and can wait 6 to 7 months of travel documents being held up, do post your application.
7) Go to Croydon PEO if you are applying in person.
Lastly pray that you get a senior case worker looking at your case.

My Ca advised against submitting ct600 as it is company liability and not personal.And they only consider SA for personal. Please let me know your thoughts.

tier1_london wrote:Just an update. I had a successful ILR application in person in Croydon PEO with a similar case to yours. My advice to you is to do the following in addition to the normal documentation.

1) File all Self assessment returns if not done so from the year of entry until now.
2) Get a letter from accountant stating that you have submitted all returns with the years mentioned clearly and that you did not owe any tax to HMRC though you filed retrospectively. This letter is key is what my solicitor told me.
3) If possible, also get your accountant to mention the rule from HMRC rulebook about it being not mandatory to file returns for directors with Dividend below threshold. (I did not do this by the way)
4) Submit all your SA302, CT600 & employment History that HMRC gives you.
5) Clearly mention in your covering letter that you have done your Self assessment returns retrospectively because you did not realise this earlier as per your accountant's advice. Now that it came to your notice, you fixed the problem and also mention that you did not owe any tax. Being honest and forthright about the issue is better because HO can clearly know about retrospective filings.
6) My solicitor advised me to apply by post - the simple reason being HO getting some clarity and precedence with other cases like this before your case is comes up for consideration. I took the risk but if you have the time and can wait 6 to 7 months of travel documents being held up, do post your application.
7) Go to Croydon PEO if you are applying in person.
Lastly pray that you get a senior case worker looking at your case.

While it is true that CT600 is company accounts and not your personal liability, there is a direct correlation between dividends shown on your self assessment returns and the profits shown for the company in CT600. A lot of rejections were happening because of CT600 not reflecting the required profits to match dividends claimed in Self assessment returns. Some have converted the dividends drawn as expenses later and this is being treated as deception rightfully so by Home Office. So just to make your case stronger, submit all of these documents. The case worker can choose to see it if they wish. If your solicitor is advising not to, I would really think of changing him. Google for a good solicitor. The one I used was top ranked (in immigration) with a lot of successful ILR approvals. So he knows what he is doing.

@ maverick2000

When do you plan to apply ? In person or by post ?

AML2015 wrote:@ maverick2000

When do you plan to apply ? In person or by post ?

AML Im unable to read my PMs!! Have not decided yet!!