Am I required to file a Tax Return on behalf of P as deputy?
Being appointed as a property and affairs deputy carries the sometimes onerous task of ensuring that a self-assessment tax return has been filed on behalf of P, should one be required. An accountant can be instructed to complete the return on the deputy’s behalf, if it is complex. If an accountant is instructed, the deputy will need to provide all tax certificates for each bank account, investment portfolio(s), shareholding(s) and any other relevant capital that P has by way of investment. A tax certificate can be requested from any organisation as can a schedule of any trading or sale of shares that attracts a disclosable capital gain.
Should an accountant advise that a tax return is not required, it is best practice to ensure that this advice is received in writing. This will provide a clear record of the deputy considering P’s tax position each deputyship year and ensuring that the fund is being managed in a tax compliant manner.
If a tax return is required and a tax return has not been submitted previously, P will need to be registered for self-assessment before the first tax return can be filed. In order to register P with HMRC, the deputy will need to send a letter providing the following information:
- Deputy order;
- P’s national insurance number;
- Deputy’s contact details;
- Date the circumstances of P changed;
- Unique taxpayer reference if applicable
Tax return’s for the year ending 5 April 2019 will need to be filed online by midnight on 31 January 2020. The tax owed will also need to be paid to HMRC by midnight on 31 January 2020, although there might be payments in account required in July in certain circumstances. Tax owed can be paid by cheque, made payable to HM Revenue and Customs.
It is important that the deadline for filing the tax return is complied with. Financial penalties will be applied if the tax return is filed late. It may in some circumstances be possible to apply for a penalty to be lifted if the reason that the tax return was filed late was as a result of P’s incapacity, pending the appointment of a Deputy.
Similarly, it may be appropriate to apply for a tax rebate on behalf of P if their income is less than the personal allowance, if their employer applied the wrong tax code or if their income and savings had fallen since they last completed a tax return. To ensure that the application for a rebate is cost proportionate, the rebate would need to be more than the cost of preparing the tax return if an accountant has been instructed.
If P pays tax through a PAYE code, the refund can be paid with their wages or pension. If P has paid too much tax under self-assessment, the refund can be paid into their self-assessment account or paid directly into the deputy account.
*Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*