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HMRC internal manual

Self Assessment Manual

From
HM Revenue & Customs
Updated
, see all updates

Records: maintain taxpayer record: maintain trade

This subject consists of the following

Trades

Where there are trading profits including profit from a profession or vocation, they have to be set up as sources on the SA record for compliance and recovery / enforcement purposes. A partnership can have only one live source set up on the SA record at a time. There is no limit to the number of sources that can be entered on an SA record for an individual, including a partner, or a trust.

If you want to set up a new trade see the subject ‘Set Up Trade’, in section ‘Set Up Taxpayer Record’ (SAM100250).

PAYE income and other sources are not set up on the SA record.

Amending trade details

You can amend details of trades held on the SA record. These are

  • Business name
  • Business address
  • Trade description
  • TCN
  • Trade start date
  • Trade end date

If any of these details change you should amend them using function MAINTAIN TRADE.

Note: When updating the TCN, you should note that from July 2014 the generic TCN 6616 is used for the setting up of all new cases in SA unless the customer is CIS, in which case TCN 3001 is used. There is therefore no need to alter the TCN from 6616, unless it is to move to TCN 3001 or vice versa.

The same address can be used for more than one trade. If the address changes or goes RLS you will have to make the amendment for each trade source with that address.

If the partnership trade source ceases, also use function MAINTAIN PARTNER to cease the partnership source for each partner.

Changing main source

Unless the SA record is linked to PAYE, where you set up more than one trade / partner source and do not set up the main source first, you will need to nominate the main source. Function MAINTAIN SOURCES is used for this purpose.

This action is necessary because where the SA record is not linked to a PAYE record, the system

  • Uses the main source to determine where the SA record should be located
  • If appropriate, prompts the operator to transfer the record, indicating the proposed new Organisation Unit

The main source may be used for addressing correspondence and is also used in

  • Cases where it is necessary to establish the level of charge to be included in a Revenue Determination because either one or more returns are overdue
  • The National Tracing System

Updating return profile

If you cease a trade or set up a new trade, consider using function MAINTAIN RETURN PROFILE to ensure that the correct supplementary pages to the tax return are issued for the following year.

Automatic cessation of trade

Any live trade source(s) (and/or live partnership source(s)) may be ceased automatically and this will be done

  • As a result of an update from NPS where a customer has ceased paying Class 2 National Insurance Contributions

Or

  • Following the processing of a tax return for CY-1

An annual feed of cases will be sent from NPS where the customer ceased paying Class 2 National Insurance Contributions in the previous tax year (and has not subsequently restarted the payments) to prompt the automatic update of all live trade (and partnership) sources on SA.

For example

The customer ceased paying Class 2 National Insurance Contributions on 30 September 2011 (tax year 2011-2012). The annual feed from NPS in early 2013 (tax year 2012-2013) would include this case and SA would be updated to reflect the date of cessation of 30 September 2011 against all live trade (and partnership) sources.

An SA Note will be added to the SA record showing ‘Trade/Partnership sources(s) ceased on receipt of Class 2 NIC cessation information’. Note: It is possible that an update has been received from NPS to show that the customer ceased paying Class 2 NIC but, because that trade source had not been set up on the customers record, there is no live trade record to update and as a result there will be no SA Note to amend.

Alternatively, where a tax return (SA100) for CY-1 is processed and the customer has one or more trade sources shown on the return which have all ceased, and the number of trade sources on the return matches the number of trade sources shown on the SA record, a ceased date of 5 April (in the return year) will be set against each trade source on the SA record.

Where a short tax return (SA200) for CY-1 is processed and there is a ceased date for the self employment, then a ceased date of 5 April (in the year of the return) will be set against all self employment sources on the SA record.