Double tax? please help?

Question

hi i used to be director of a fast food buisness and probably still am.

my father put me down as a director.but because of a big family problem which i had with them i left them and moved to a complete different area,and want to start work

,just wondering as i dont have contact with my family any more or dont know whats going on,will i get charged double tax? and what is the situation for something like this? i have really finished with them and dont want to see or sign anything with them or anything like that. what can i do? thanks

Answer 1

It is easy enough to check whether you are still listed as a director of the company - go to www.companieshouse.co.uk . You will see a box on the left hand side saying "Search company information" with a link underneath saying "with our WebCheck service". Click on this link.

You will then be asked to enter either the company name or number. When you get through to the company record, there is a link on the left hand side of the screen saying "Order information on this company". Click on this link.

You will then come to a page with a list headed "Most popular documents and reports". You will need the "Current Appointments Report".  It costs £1 and can be downloaded in minutes.

This gives you the current list of directors held by Companies House.

If you are not on this list, you are not a director any more. If you are on this list you will probably need to see a solicitor if you do not want to have contact with the other directors. This is because in order to resign you need to have one of the remaining directors or the company secretary sign the termination of appointment form. Your solicitor will then handle the link to the company and work with you to ensure your link to the company is removed.

As far as tax is concerned, if you have not received a salary or dividends or benefits from the company, you will not have been charged tax on them.  If you have, on resigning they are legally obliged to give you a P45, which you can take to your new employer.

Otherwise, keep an eye on the PAYE tax code issued to your new employer and if necessary call the Revenue up to make sure they have your new employer listed as your 'primary' job (and so giving you your full tax code against this job).  It may be worth double checking your tax calculation at the end of the tax year to make sure that you have paid the right amount over the course of the year (the PAYE code is supposed to sort this out but it is a very rough measure and recent evidence has shown that HMRC is not able to effectively handle people with several sources of income using the PAYE system alone).

Answer 2

There is probably a tax record under PAYE for you under your Father's company reference. As a director you are treated as an employee, and directors are obliged to complete an annual Tax Return. If you have "gone unknown" and have not completed Tax Returns, there may be financial penalties accruing. How long ago did you leave your former area?

You could resign as a director, do it through a solicitor if you don't want contact, and let the solicitor give his address for incoming correspondence. What is the position with the company paying you salary, bonuses or dividends? I would assume as it is not known where you are, that no payments are made.

I think you should contact a tax office, to sort out this directorship, and update your tax record with new address, etc. Take your National Insurance number with you and evidence of your identity, and your record can be traced. You may have to make an appointment. It doesn't have to be the tax office dealing with the company. Staff can have a limited view of your record, and tell you if your directorship has been terminated, they may be able to tell you any pay for 2007/2008, and they can advise on the Tax Return position. If no tax is due, penalties can be cancelled after any outstanding Tax Returns have been completed. There may also be director's benefits to be examined.

If your directorship has not been terminated, a code of BR (basic rate) can be issued in case anything is paid, for example, if wages are paid direct into a bank account. Then you could have your tax allowance at your new job. Rather than paying double tax, otherwise it would be likely you would be getting two sets of tax allowance, and end up underpaid. Tax office staff are bound by the Official Secrets Act, and would not give your family your address, or any other details about you.

Edit: If you left 7 months ago, you should have only 1 Tax return outstanding. You have until 30th September to get it in if you want HMRC to calculate your tax. If you do it on-line, you have until 31st January. There will be no financial penalties until then. Have you any evidence (eg payslips or bank statements) of what the company paid you until the day you left, or any bank statements since? If you run short of time before sorting it, you can put estimated amount on Tax Return pro-tem. I would still ask the tax office for help.