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HMRC internal manual

Self Assessment Manual

From
HM Revenue & Customs
Updated
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Returns: individuals returns: repairing returns after 31 December: individuals (Action Guide)

If you are processing a return

  • After 31 December following the end of the return year

And 

  • A repair(s) is identified which would increase the taxpayer’s liability (This content has been withheld because of exemptions in the Freedom of Information Act 2000)  

And

  • No repayment is due

Follow steps 1 - 46 below. For details of how to access the SA functions, select ‘Index Of Functions’ on the left of the screen.

This guide is presented as follows

  Steps 1 - 7
   
  Steps 8 - 24
  Steps 25 - 36
  Steps 37 - 46

The return can be processed using function CAPTURE RETURN

1. Enter the return details in function CAPTURE RETURN without making any repairs
   
2. Over-ride error messages displayed during capture and accept the taxpayer’s figure(s) (SAM121265)
3. If the taxpayer’s version resulted in an overpayment, and the repair will result in a liability (This content has been withheld because of exemptions in the Freedom of Information Act 2000) , set the No Repayment signal when processing the taxpayer’s version
4. Include a Customer Service Message (SAM121435), where the taxpayer has requested Revenue Calculation to tell the taxpayer that you have identified an entry or entries that require revision and that you will deal with the revision(s) as soon as possible
  Then, the following day or next available day
5. Use function AMEND RETURN to enter the figures following repair. Do not select repair messages or enter Customer Service Messages
6. Select Close and Exit from the File menu heading when you are sure all changes necessary have been made. You will be presented with the SAVE AMENDMENT screen
7. Save the changes as follows
  * Select the [Save] button. You will be presented with the SAVE AMENDED RETURN screen for each part of the return you have changed
  * Select the Correction radio button for each change made to the return. When you have completed the SAVE AMENDED RETURN screen for all of the return changes select the [OK] button, you will automatically be returned to the menu. Remember to send a letter of explanation to the taxpayer

Bankruptcy cases, where the liability is entered using function CREATE RETURN CHARGE

| 8. | Use function VIEW TAXPAYER DESIGNATORY DETAILS to obtain the Relevant Date and to ensure that the Last SA Return Required For Year Ending 5th April signal is set to the year of the return on the old record | || | 9. | Calculate the liability of the taxpayer for the periods to and from the Relevant Date by apportioning the income, allowances and reliefs without taking into account any adjustment due to a repair  | | 10. | If the taxpayer’s version resulted in an overpayment, and the repair will result in a liability (This content has been withheld because of exemptions in the Freedom of Information Act 2000) , set the No Repayment signal when processing the taxpayer’s version | | 11. | Where you do not intend dealing with the repair(s) for at least 3 days | |   | * Prepare a manual Tax Calculation for the period 6 April to the Relevant Date for issue in a Revenue Calculation case and include a Customer Service Message stating that you have identified an entry or entries that require revision and that you will deal with the revision(s) as soon as possible | | 12. | Use function CREATE RETURN CHARGE to enter the liability for the period 6 April to the Relevant Date on to the taxpayer’s old SA record | | 13. | Issue the Tax Calculation prepared in a Revenue Calculation case to the person set up to act in a capacity for the taxpayer | | 14. | Prepare a manual Tax Calculation for the period from the Relevant Date to the 5 April for issue in a Revenue Calculation case. Include a Customer Service Message stating that you have identified an entry or entries that require revision and that you will deal with the revision(s) as soon as possible | | 15. | Use function CREATE RETURN CHARGE to enter the liability for the period from the Relevant Date to 5 April on to the taxpayer’s new SA record. To do this
  | |   | ### Where more than 80 per cent of the total liability for the year is satisfied by tax deducted at source | |   | * Enter the whole amount of the liability for the period from the Relevant Date in the Underpayments for earlier years field | |   | * Enter 0 (zero) in all the other amount fields | |   | ### In all other cases | |   | * Increase the entry in the Income tax due after reliefs field by the appropriate amount of the pre Relevant Date liability (SAM121272) | |   | And | |   | * Increase the entry in the Overpayments for earlier years field by the appropriate amount of the pre Relevant Date liability | |   | ### Where, exceptionally the appropriate amount of the pre Relevant Date liability is negative | |   | * Treat the amount as positive and increase the entry in the Tax deducted at source field by the amount
 
And | |   | * Treat the amount as positive and increase the entry in the Underpayments for earlier years field by the amount | | 16. | Issue the Tax Calculation prepared in a Revenue Calculation case to the taxpayer together with a copy to the agent where form 64-8 is held | | 17. | Calculate the taxpayer’s revised liability to and from the Relevant Date taking into account the repaired amount(s) | | 18. | The following day use function CREATE RETURN CHARGE to enter the revised liability on both the old and new records. (Remember to make the additional entries on the new record in respect of the appropriate amount of the pre Relevant Date liability) | | 19. | Prepare and issue revised (original in Self Calculating Cases) manual Tax Calculations including the Revision Notice | | 20. | Where applicable carry out the Coding (Integrity) Check and record the result on the return. You cannot record the result on the computer as the return details have not been captured | | 21. | Use function AMEND TAXPAYER SIGNALS to unset the Manual Return signal on the new record | | 22. | Update the taxpayer’s return profile on the new record with details of the supplementary pages the taxpayer has returned using function MAINTAIN RETURN PROFILE | | 23. | Enter additional reasons for setting the signal where more than one reason applies in the Review Notes field | | 24. | Check the return along with the taxpayer’s new record for any of the following 5 situations. Where the taxpayer has made a claim to reduce payments on account see section ‘Claim to adjust payments on account’ (SAM1000 onwards) | |   | * Select the ‘Action 1’ and so on, in the right hand column to find out the actions you need to take in each situation |

Situation Action
   
LU (Liability Unlikely) set on the record and the return shows Tax and / or Class 4 NIC liability Action 1 (Word 32KB)
Date of cessation of a business shown on the return (box 7 on the Self-employment (full) page SEF 1 or box 6 on the Self-employment (short) page SES 1, SA200 box 3.3) Action 2 (Word 34KB)
Date taxpayer ceased to be a partner in a business shown on the return (box 4 on the Partnership (full) page PF 1 and on the Partnership (short) page PS 1) Action 3 (Word 45KB)
Taxpayer wants to transfer surplus allowances to the spouse or civil partner (box 16 of the Tax reliefs section of the SA100 page TR 4, and box 11 of the Age related married couple’s allowance section of the Additional information page Ai 3) Action 4 (Word 32KB)
An underpayment of less than £3000.00 arises and the taxpayer has not ticked the box on the return to show that the underpayment is not to be coded (box 2 in the Finishing your Tax Return section page TR 5, SA200 box 12.8) Action 6 (Word 76KB)

Computer calculation is incorrect when using function CAPTURE RETURN. Liability to be entered using function CREATE RETURN CHARGE

| 25. | Abort function CAPTURE RETURN | || | 26. | Calculate the taxpayer’s liability manually without taking into account any adjustment(s) due to a repair. You may want to use the working sheet within the return guidance notes to achieve this | | 27. | If the taxpayer’s version resulted in an overpayment, and the repair will result in a liability (This content has been withheld because of exemptions in the Freedom of Information Act 2000) , set the No Repayment signal when processing the taxpayer’s version | | 28. | Where you do not propose dealing with the repairs within the next 3 days | |   | * Prepare a manual Tax Calculation for issue in a Revenue Calculation case and include a Customer Service Message (SAM121435) to tell the taxpayer that you have identified an entry or entries that require revision and that you will deal with the revision(s) as soon as possible | | 29. | Use function CREATE RETURN CHARGE to enter the liability | |   | Note: A Section 135(5)(a) deduction may be due. | |   | The Share Scheme supplementary pages deal with the taxable amount arising on the grant of a share option. A liability will only arise on the grant of an option under an unapproved share option scheme, and only if | |   | * The option can be exercised more than seven years after the date it was granted
 
And  | |   | * The option price is less than the market value of the shares on the date of grant | |   | The charge arises in accordance with the provisions of S135(2) ICTA (the measure of the charge in accordance with S135(5)(b) ICTA). | |   | In accordance with S135(5)(a), the tax charged on the grant of the option shall be deducted from any tax chargeable on the exercise, assignment or release of the option. Where the tax charged on the grant of the option exceeds the tax chargeable on the exercise of that option, the deduction is restricted to the tax chargeable on the exercise of the option. | | 30. | If a Section 135(5)(a) deduction is due (given in terms of tax) you must | |   | * Calculate the amount to be entered in the Income tax due after reliefs field. This is the equivalent of | |   | * For 2001-02 box c7.47 or w72) | |   | * For 2002-03 box c7.49 or w74 | |   | * For 2003-04 box c7.47 or w72 | |   | * For 2004-05 and 2005/06 box c7.49 or w74 | |   | * For 2006-07 box c7.49 + c7.54 + c7.55, or box w74 | |   | * For 2007-08 boxes A208 + A213 | |   | * Reduce that amount by the S135(5)(a) deduction | |   | * Enter the result in the Income tax due after reliefs field | |   | * Complete any other appropriate fields on the screen | | 31. | Issue the Tax Calculation to the taxpayer together with a copy to the agent where form 64-8 is held | | 32. | Calculate the taxpayer’s revised liability taking into account the repairs and prepare a revised (original in Self Calculating cases) manual Tax Calculation including Revision Notice for issue | | 33. | The following day use function CREATE RETURN CHARGE to enter the revised liability. (Remember to reduce the amount in the Income tax due after reliefs field by the S135(5)(a) deduction) | | 34. | Issue the revised (original in Self Calculating cases) Tax Calculation | | 35. | Update the taxpayer’s return profile with details of the supplementary pages the taxpayer has returned using function MAINTAIN RETURN PROFILE | | 36. | Check the return along with the taxpayer record for any of the following 5 situations. Where the taxpayer has made a claim to reduce payments on account see section ‘Claim to adjust payments on account’ (SAM1000 onwards) | |   | * Select the word ‘Action 1’ and so on, in the right hand column to find out the actions you need to take in each situation |

Situation Action
   
LU (Liability Unlikely) set on the record and the return shows Tax and / or Class 4 NIC liability Action 1 (Word 32KB)
Date of cessation of a business shown on the return (box 7 on the Self-employment (full) page SEF 1 or box 6 on the Self-employment (short) page SES 1, SA200 box 3.3) Action 2 (Word 34KB)
Date taxpayer ceased to be a partner in a business shown on the return (box 4 on the Partnership (full) page PF 1 and on the Partnership (short) page PS 1) Action 3 (Word 45KB)
Taxpayer wants to transfer surplus allowances to the spouse or civil partner (box 16 of the Tax reliefs section of the SA100 page TR 4, and box 11 of the Age related married couple’s allowance section of the Additional information page Ai 3) Action 4 (Word 32KB)
An underpayment of less than £3000.00 arises and the taxpayer has not ticked the box on the return to show that the underpayment is not to be coded (box 2 in the Finishing your Tax Return section page TR 5, SA200 box 12.8) Action 6 (Word 76KB)

Computer cannot calculate liability, manual calculation required and liability is to be entered on the taxpayer record by using function CREATE RETURN CHARGE

37. Calculate the taxpayers liability using the taxpayer’s figures. Do not make any repairs. There is a calculation guide you may want to use for taxpayers with Capital gains and Life assurance gains and / or Lump sum compensation payments chargeable under Section 148 ICTA 1988. There are no calculation guides for other (rare) combinations
   
38. Use function CREATE RETURN CHARGE to enter the liability on the taxpayer’s SA record
39. If the taxpayer’s version resulted in an overpayment, and the repair will result in a liability (This content has been withheld because of exemptions in the Freedom of Information Act 2000) , set the No Repayment signal when processing the taxpayer’s version
40. Where you do not propose to deal with the repairs within the next 3 days
  * Prepare and issue a manual Tax Calculation in a Revenue Calculation case to the taxpayer together with a copy to the agent where form 64-8 is held. Include a Customer Service Message (SAM121435) stating that you have identified an entry or entries that require revision and that you will deal with the revision(s) as soon as possible
41. Use function CAPTURE RETURN to enter the taxpayer’s return details and make the relevant repairs
42. Obtain a copy of the abbreviated reasons for repair(s) made during amendment by selecting the Copy option from the Edit menu heading on the ALL REPAIRS FOR THIS RETURN screen and copying the details into a separate file
43. Calculate the taxpayer’s revised liability
44. Use CREATE RETURN CHARGE to enter the taxpayer’s revised liability
45. Prepare and issue a revised manual Tax Calculation together with a Revision Notice and Customer Service Messages if required
46. File the return away