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HMRC internal manual

Self Assessment Manual

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HM Revenue & Customs
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Records: set up taxpayer record: when an SA record is required

PAYE cases

The National Insurance and PAYE Service (NPS) will automatically perform end of year reconciliations of individual records. Where the SA indicator is not set, work item 117 ‘Potential SA case’ will be created if the following applies

  • There is a current live employment, JSA claim, IB claim or occupational pension

And

  • The total taxable income before allowances are set off exceeds £100,000

Or

  • The individual or their partner is entitled to receive Child Benefit (or someone else claims Child Benefit for a child who lives with the individual ) which is liable to the High Income Child Benefit Charge (from 2012-2013), and the individual has the higher adjusted net income

Guidance on how to deal with work item 117 can be found in the Action Guide (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

From April 2014, where there is a Unique Taxpayer reference (UTR) on the NPS record, the system will attempt to reactivate an SA record from WMI117, and from October 2014, where there is no UTR on the NPS record, the system will attempt to create an SA record.

When NPS carries out either a daily or annual tax coding calculation, where certain conditions are met and the SA indicator is not set, work item 217 (Potential SA Case) is created. Information can be found at PAYE13140. Guidance on how to deal with work item 217 can be found in the Action Guide for Potential SA Cases above.

From October 2013, where there is a UTR on the NPS record, the system will attempt to reactivate a dormant SA record from WMI217, and from October 2014, where there is no UTR on the NPS record, the system will attempt to create an SA record.

NPS work item 236 is created as a result of both end of year reconciliation, and a tax coding calculation where an underpayment exists which cannot be collected via the taxpayer’s tax code. Guidance on how to deal with work item 236 can be found in the Action Guide (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

From October 2013, where there is a UTR on the NPS record, the system will attempt to reactivate a dormant SA record from WMI236, and from October 2014, where there is no UTR on the NPS record, the system will attempt to create an SA record.

Full criteria for an SA record are detailed in subject ‘Criteria For PAYE/SA Record’ (SAM100050).

An SA record is also required for all taxpayers who have

  • A PAYE income source that requires issue of an annual return
  • A PAYE income source that gives rise to an underpayment on a Tax Calculation, which is either unsuitable for coding out or amounts to £2,000 or more
  • Refused to complete a relevant review form
  • Completed the relevant review form and evidence indicates there is undisclosed or understated income
  • Completed form SA1 identifying a new or existing source of income which requires completion of an SA return.

In day to day work, you will need to set up an SA record only where you recognise that the SA criteria is met and an SA return is required for the previous year. See also SAM100020.

Non-PAYE cases

A taxpayer will have to complete form CWF1, SA400, SA401, SA402 or SA1 if the criteria at SAM100050 are met and an SA record is needed. The reasons for the completion of either of these forms may include

  • Trading profits or profits from a profession or vocation
  • Charges arising on interest and annual payments
  • Foreign income
  • Taxed Income liable at higher rate
  • Capital Gains Tax liability
  • Charges on income not otherwise charged to tax