Self Assessment guide for limited company directors

As a company director, you are liable to complete a Self Assessment if your entire income is not taxed at source, such as a salary taxed through the PAYE scheme. If your income is supplemented through taxable dividend payments and this is not declared and taxed properly by HMRC, then you will be subject to legal actions such as prosecution or disqualification from your status as company director.

In this guide from QuickBooks, we explore what Self Assessment is, who needs to fill them, and what limited company directors need to know about Self Assessment.

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What are Self Assessments & how do they work?

A Self Assessment is a method of paying tax that requires an individual to detail their taxable income to HMRC and pay them directly, as opposed to automatic methods of tax collection such as PAYE schemes.

When completing a Self Assessment, you must include all taxable income earned in the relevant tax year, and any tax allowances or reliefs you may be entitled to.

Self Assessments can be completed via a paper form or online, although the deadlines for both of these methods are different for each year. 

You can read more about Self Assessment deadlines in our blog ‘The Self Assessment Tax Return for Beginners’.

Who needs to complete a Self Assessment?

You will need to complete a Self Assessment if your tax is not automatically deducted from your wages or salary, or if you have earnings that are not included in your salary such as dividends or bonuses. 

If one or more of the following apply to you then you will need to complete a Self Assessment:

• You are self-employed.

• You are a partner in a business.

• You are a religious minister.

• You are a trustee or executor of an estate.

Under certain conditions, you may also need to complete a Self Assessment if one or more of the following apply to you in the tax year 2024/25:

• You are the director of a company and receive income not taxed through PAYE (Pay As You Earn).

• You have untaxed income such as interest that is paid to you before being taxed.

• You receive income from a trust, settlement, or the estate of a deceased person that has yet to be taxed.

• You earn income from foreign businesses where UK tax is due.

• You earn income from savings or investments in excess of £10,000 before tax.

• Your annual income is equal to or exceeds £100,000 (£150,000 if 2023/24) before tax.

• You or your partner receive child benefits that make your adjusted net income over £50,000.

• You deferred from a state pension lump sum from before the 6th of April 2016.

• You owe tax at the end of the year that cannot be collected via PAYE.

• You have untaxed income equal to or exceeding £2,500.

• You claim expenses equal to or exceeding £2,500.

So, how does this all relate specifically for limited company directors submitting their Self Assessments?

16 things for limited company directors to know about Self Assessment

1. Limited company directors are not classed as self-employed

You are not classed as self-employed as a company director. However, you are still required to report additional taxable income through a Self Assessment unless your income is taxed automatically.

2. You don’t need to do a Self Assessment if you are taxed through your business

If all of your income is taxed automatically before being paid to you through Pay As You Earn (PAYE), then you typically do not need to complete a Self-Assessment tax return. 

However, you will need to file a Self-Assessment if you have untaxed income, such as from dividends, rental income, or self-employment, or you have complex tax affairs. This may include receiving additional income as a company director.

Company directors who pay themselves via dividends will generally need to submit a Self-Assessment. 

This is because such income is not taxed at source, and Self-Assessment is required to calculate and pay any tax owed on this additional income.

3. Limited company directors can register for Self Assessment online

You can easily register a director for Self Assessment online through the government website. Self Assessment registrations must be completed by the 5th of October if you have not registered before, and you may be subject to a fine if you do not meet this deadline.

HMRC also accepts Self Assessments via a paper form which must be requested by telephone. The deadline for sending a paper Self Assessment is the 31st of October.

4. Self Assessments are submitted after the relevant tax year

Self Assessments are payable the day after the relevant tax year ends, for example, the end of the tax year for 2024/25 will be the 5th of April 2025, so you can submit your Self Assessment on the 6th of April 2025.

If you complete a paper Self Assessment, the deadline for submission is the 31st of October.

5. The registration deadline is 5th October

The registration deadline for Self Assessments is the 5th of October following the end of the recent tax year on the 5th of April.

You will only need to register by the 5th of October if this is your first time submitting a Self Assessment. The deadline for registering for a paper Self Assessment is the 31st of October.

6. You’ll pay a fine if you miss the deadline

You may be fined up to £100 for late Self Assessment submissions for the first 3 months after the deadline date, which can go up to £10 a day for up to 30 days after a 3 month period. If this is left for more than 6 months then penalties will significantly increase. 

You may be able to avoid late payment penalties if you contact HMRC as soon as you notice the error, and HMRC may allow you to set up a payment plan to pay off your missed payment in instalments.

7. The details you need to provide for Self Assessment are:

When limited company directors register for a Self Assessment, you will be asked for the following information:

• National Insurance Number.

• Full name and any previous names.

• Current address.

• Date of birth.

• Gender.

• Phone number.

• Email address.

8 HMRC will issue a Unique Taxpayer Reference

Once you have registered, HMRC will generate a 10-digit Unique Taxpayer Reference (UTR) code, which will be required to submit your Self Assessment. 

9. The form you use for a Self Assessment is called the SA100

The SA100 is the form for a Self Assessment tax return in the UK, but there are other supplementary SA100 forms related to how you are taxed. These are:

• SA102 for employees or company directors.

• SA103S or SA103F for self-employed/sole traders.

• SA104S or SA104F for business partnerships.

• SA105 for UK property income.

• SA106 for non-UK income or gains.

• SA108 for capital gains.

• SA109 for non-UK residents or those dual residents.

You will use the SA100 form to detail your earnings to HMRC, not including any allowances or reliefs you claim. The SA102 pages are used to detail your employment income on your SA100, and one must be completed for each instance of employment or directorship with details of relevant pay, benefits, and employment expenses.

10. You can claim specific expenses as tax relief

There are a number of costs you can claim as allowable expenses on your Self Assessment. These include:

• Office costs such as phone bills, stationary, electronic equipment.

• Travel costs such as fuel or travel tickets.

• Clothing expenses for business related attire.

• Costs of renting your business premises (if this is a cost incurred by yourself).

If you are unsure exactly which expenses are deductible on your Self Assessment, you can contact a professional, such as your accountant, to discuss which of these to detail on your Self Assessment form.

11. You may have a Personal Allowance 

The standard personal allowance that limited company directors can have is £12,570. Your personal allowance tells you how much income you can receive before you have to pay income tax on it. The personal allowance varies based on personal circumstances. 

12. Any additional salary will contribute to your total earnings

For tax optimisation purposes, some company directors may pay themselves a basic salary up to £12,570 and supplement themselves with other allowances such as shares and dividends.

13. Income thresholds will be frozen until 2026

The government has announced that income tax bands from 2024/25 will be frozen until 2026, meaning the rates will be fixed at:

• Basic rate of 20% on earnings between £12,571 to £50,270.

• Higher rate of 40% on earnings between £50,271 to £125,139.

• Additional rate of 45% on earnings equal to and above £125,140.

In Scotland these rates are as follows:

• Starter rate of 19% on earnings between £12,571 and £14,732

• Basic rate of 20% on earnings between £14,733 and £25,688

• Intermediate rate of 21% on income between £25,689 and £43,662

• Higher rate of 41% on income between £43,663 and £150,000

• Top rate of 46% on earnings above or exceeding £150,000

14. All records must be held digitally

Through the Making Tax Digital scheme, which will fully come into effect on the 6th of April 2026, the government has stated that businesses and individuals must keep digital records of their finances, use software that incorporates Making Tax Digital, and submit updates every quarter. 

This aims to completely digitise the tax system to make the process easier for individuals, businesses, and the government.

15. There are easy mistakes to make in your Self Assessment

There are a number of common mistakes that you should be aware of when completing a Self Assessment, including:

• Missing or incorrect UTR numbers.

• Over or under claiming business expenses.

• Failure to declare all sources of income.

• Relevant supplementary pages missing.

• Failure to declare benefits and tax-free allowances.

• Missing the Self Assessment registration deadline (5th of October).

• Missing the Self Assessment tax return deadline (31st of October - paper / 31st of January - digital).

• Ticking incorrect boxes.

• Incorrectly budgeting for your tax bill or not saving money throughout the year to pay your tax bill.

Some of these problems can be avoided by careful planning throughout the year, however, if your mistake is related to incorrect information on your Self Assessment then you have up to 12 months after the deadline date to amend your Self Assessment online.

16. Accounting software makes everything so much easier

You can make completing your Self Assessment easier by utilising tax software to track your income and expenses throughout the year. 

Simplify your tax and Self Assessment process with QuickBooks’ easy to use accounting software. 

QuickBooks takes the hassle out of Self Assessments by connecting directly to your bank, allowing you to easily track and record your taxable income, deductible expenses, and more. We provide a range of plans to suit the needs of company directors, limited companies, and self-employed users by empowering them with useful accounting tools, including:

• Preparing records for Self Assessments.

• Income tax estimates.

• Income & expenses management.

• VAT submissions direct to HMRC.

• VAT error checkers

• Cash flow forecasting.

You can try QuickBooks free for 1 month, or visit our Plans & Pricing page to discover how to simplify your Self Assessment process today.

Frequently asked questions

How can I register a director for a Self Assessment?

If you are required to complete a Self Assessment as a company director, you must register by the 5th of October through the government website.

Remember that you will only need to register a director for Self Assessment if you earn income that is not taxed before being paid to you, such as dividends on shares. If your salary makes up the entirety of your income, then you are not required to complete a Self Assessment and your tax will be automatically deducted through PAYE.

What should I do differently if my Self Assessment is over £100K?

If you start earning over £100,000 a year, there will be some changes to your tax rate that you should be aware of, this also includes a gradual reduction in your £12,570 tax-free personal allowance.

You will also be required to complete a Self Assessment when you earn over £100,000, regardless of whether your entire income is taxed through PAYE. This is because you will now be considered a ‘high earner’, and HMRC needs to understand the way in which you earn your salary and what your sources of income are.

With regards to the effects your salary has on your tax-free personal allowance of £12,570, this amount will gradually decrease by £1 for every £2 you earn above £100,000.

Who can be a limited company director?

Most people can be a limited company director if they are the right fit for the job, and each limited company must have at least one appointed director. There are only a few restrictions to appointing your company director, these are:

• Your company director must be over 16 years of age.

• They must have no court ordered disqualifications.

• They must not have a history of bankruptcy. 

What are the responsibilities of a director?

As a company director, you are responsible for running the company and providing Companies House with any information they require. This includes:

• Keeping account records.

• Paying Corporation Tax.

• Maintaining company records.

• Maintaining a Persons with Significant Control (PSC) register.

• File an annual Confirmation Statement.

• Informing shareholders about any benefits you may receive from company decisions or transactions.

How do directors get paid?

Directors of small companies typically get paid in two ways: either through a salary and dividends.

As a director, you can choose to take a salary for the work you do. If this salary is at or above the Lower Earnings Limit for National Insurance (currently £6,396 for 2024/25), it must be processed through the PAYE system. 

PAYE ensures that income tax and National Insurance are deducted and paid to HMRC on your behalf. 

In addition to a salary, many directors are also shareholders, which allows them to receive dividends. Dividends are paid out of the company’s profits after Corporation Tax has been applied, and they are often a more tax-efficient way for directors to pay themselves.

Unlike salary, dividends do not require National Insurance contributions, making them a popular option for directors to supplement their income. Many directors opt to take a small salary and then top up their earnings with dividends to benefit from tax advantages.

Do I need to file a Confirmation Statement?

A confirmation statement is a confirmation that the records the government holds about your company are accurate and up to date, and one must be completed each year. This will include confirmation of your current company director and secretary, People with Significant Control (PSC), and your company’s registered address.

A Confirmation Statement will be required each year, but the date on which this must be filed is different for every company depending on the date that your company incorporated, and the date you last filed a Confirmation Statement. You have 14 days from the end of your review period to file this statement.

Your Confirmation Statement will cost £13 to file online, or £40 to send a paper form.

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