Have you had a nudge from HMRC?
HMRC are sending out letters again, this time to Persons of Significant Control (PSCs) that declare an income below £100,000 or simply haven’t submitted a tax return …
Before PSC was introduced, a UK company only needed to record immediate, legal owners of their shares and send these to Companies House.
Since the 6th of April 2016, companies must now look at their entire ownership structure to identify relevant persons who have significant control of the company.
Broadly speaking, a PSC:
- directly or indirectly owns more than 25% of the shares in a company
- directly or indirectly holds more than 25% of the voting power of a company
- has the right to appoint or remove the majority of directors of a company
- can exercise significant influence over the company
Much of this information is on a public register at Companies House, so it’s also available to HMRC and their Wealth Team is now sending multiple letters to individuals on the PSC register.
Firstly, one is directed at individuals on the PSC register who have submitted a 2020/21 tax return with income less than £100,000. Secondly, the other one is being sent to PSCs who are not yet submitting self-assessment tax returns.
And this includes benefits received from the company, such as share options or income created from the disposal of shares. If HMRC identifies any gains or additional sources of income, taxpayers will be asked to amend their 2020/21 and 2021/22 tax returns.
Letters were sent in late October 2022, so be sure to take a look for any brown envelopes in your correspondence, and make sure you speak to your accountant and get it dealt with before any penalties are applied.
Roger loves ‘getting his hands dirty’, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice.
Using an extensive network of business contacts to leverage the best guidance and practical solutions, he has been called a Business Godparent due to his caring, hands-on approach.
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