New guidance for PSCs on tax returns
Recently, HMRC says it will be writing to around 3,000 PSCs who have not declared their entire income or who have not filed a 2022/23 tax return. They have also issued an advisory deadline of August 23rd to amend and re-send any Self Assessment tax returns that were deemed incorrect.
What is a PSC?
A PSC, or a Person with Significant Control, is a shareholder who owns more than 25% of a limited company. They may also be defined as those who have the right to appoint or remove directors, or exercise a significant level of control in another way.
What has HMRC said?
Here are the main points that companies and individuals need to be aware of:
- Companies must identify all the people who can control it and report this information to Companies House. HMRC will then review this information and write to the PSC where it believes they may need to act.
- The 23rd of August deadline is the latest opportunity for relevant parties to ensure their 2023/4 tax return includes all income sources.
- For PSCs who didn’t complete a 2022/3 SA tax return, HMRC are advising they complete an online questionnaire to establish whether self-assessment registration is necessary.
- The PSC should contact HMRC using the contact details given in the letter if they do not believe a return is required.
- Enquiries may be opened, and penalties issued if HMRC discovers an error in a past SA return after August 24th.
Time to Pay guidance
Time to Pay arrangements serve as a way for PSCs, directors and individuals to manage both personal and business debts. Following the increase in the maximum tax debt that can be included to £30K for individuals and £50K for businesses, HMRC has recently provided a helpful synopsis of the application criteria as shown below:
| Self-assessment | Employer’s PAYE | VAT | |
| Maximum liability | £30,000 | £50,000 | £50,000 |
| Timing | Within 60 days of the payment deadline | Missed deadline to pay employer PAYE | Missed deadline to pay a VAT bill |
| Nature of the debt | N/A | Debts are five years old or less | Debt for an accounting period that started in 2023 or later |
| Tax return filing | Has filed the latest SA return | Has filed employer PAYE and construction industry scheme returns | Has files all tax returns |
| Other considerations | Debt must be paid off with 12 months
There must be no other payment plans or debts with HMRC |
Debt must be paid off with 12 months
There must be no other payment plans or debts with HMRC |
Not if in cash accounting or annual accounting schemes or make payments on account
Debt must be paid off with 12 months There must be no other payment plans or debts with HMRC |
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