Do you know if you need to submit a Form 42 to the Inland Revenue?

Did you know that almost all incorporated companies are now required to submit a Form 42 to the Inland Revenue?

If you have issued shares to an employee, you should complete a Form 42, as the shares are a taxable benefit.

If your company was incorporated from 6th April 2003, you are also required to complete the 16-page form if shares were issued on formation of a company, and the shareholder then becomes a director and employee. Even if the shares are not subject to income tax liability!

For the current tax year, the Government has extended the deadline for submitting Form 42 to 6th September 2004, but only in cases where the Form 42 has not already been issued.

If you have already received a Form 42, you would still have needed to submit it to the Inland Revenue by 6th July 2004.

Officially the company secretary should sign Form 42 but it is understood that the acting agent may do so (this has been agreed informally, and so may change).

Failure to submit the form in time and accurately can result in penalties.

If you would like to discuss this new legislation in any more detail, please call Darren Specterman, Tax Partner, on 020 8458 7427 or email him at darrens@glazers.co.uk.

Top