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HMRC internal manual

Self Assessment Manual

Records: maintain taxpayer record: liability unlikely

Some taxpayers will be within SA simply because they have income from a certain source. For example, Rent a Room.

In some cases that source may show a loss year after year, and the taxpayer will advise that profits are unlikely for the foreseeable future. Rather than issue an SA return every year, it will suffice to issue a return periodically to check the position.

In this circumstance, on receipt of a return the taxpayer may question the need to complete it. You should advise him or her that the return should be completed and filed. On receipt, you will consider whether a return is required in future years, and if so, how often.

Up to July 2017 the signal  could be set on Trusts SA records to inhibit the issue of a Trust and estate return for a period of up to 5 years but the signal should no longer be used for such cases. A return would have been issued automatically for the year following that entered in the LU YEAR field.

After the record had been selected by the automatic selection process for bulk issue of returns, the computer would l extend the LU YEAR period by five years.

When the return is captured, if it shows liability to tax and / or Class 4 NIC a work item is created on the ‘Returns Review’ Work List as LIABILITY UNLIKELY. Detailed advice is available in the ‘Returns’ business area, section ‘Returns Work Lists’.