FLR Question Earnings through Limited Company

[drewchad]

In applying for FLR 3 year extension, with regard the questions about profession (q's 46-50), I am unsure what to put:

I work through a Ltd Co., so am not self employed, rather employed by my Ltd Co. I draw a small wage below NI thresholds & basically live off savings. However there is a reasonable amount (>£1k per week) of money going through my business account.

(My Earnings are minimised to take advantage of Extra Statutory Concession C16 on the eventual winding up of my company and the removal of the £10,000 tax free band of corporation tax for small companies. (some fairly aggressive tax planning).)

I also haven't furnished a tax return, as SA100's aren't due until Jan '06 for 2004-2005 tax year, so what proof of income are they looking for? I am proposing to send in proof of directorship and shareholding plus personal and business bank accounts along with contracts, invoices raised and payslips where I have them.

Am I likely to need to provide a business plan? Are people ticking employed or self employed when working through a limited company? I know the tax definition is employed but everywhere else (banks etc.) seem to consider you self employed.

[John]

I also haven't furnished a tax return, as SA100's aren't due until Jan '06 for 2004-2005 tax year, so what proof of income are they looking for?

There is of course absolutely nothing to stop you doing your Self Assessment tax return now for the year to 5th April 2005. Submitting it now will not make any tax liability payable any earlier ... that would still be due on or before 31st January 2006.

Proof of your income? The P60 issued to you by your company. The tax vouchers issued to you every time your company pays you a dividend.

[drewchad]

The figures on my P60 are fairly nominal ie up to the NI LEL, and only from mid January to March so about £1k. I need to get my application in urgently so won't have time to complete an SA100.

[John]

Depends of course upon your number of income sources etc but completing a Self Assessment tax return is quite painless, especially if you use the HMRC online service. If you are thinking of using that then register of their website today so that you get sent an activation PIN. Once you have that submitting the tax return is only a few minutes work.

More detail at www.hmrc.gov.uk .

No dividends paid to you by your company in the tax year to 5th April 2005?