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HMRC internal manual

Self Assessment Manual

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HM Revenue & Customs
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Returns: individuals returns: when to use function create return charge

There are eight situations where the taxpayer’s liability should be calculated manually and the resulting liability entered on the taxpayer’s record by using function CREATE RETURN CHARGE.

The situations are where:

  1. The number of sets of supplementary pages for income from any of Employment, Ministers of Religion, Self-employment or Lloyds Underwriters exceeds 50

  2. A part year return for the year of permanent cessation is received in the year of permanent cessation

  3. There is a need to enter pre and post insolvency liabilities for a taxpayer for the same tax year

  4. The automatic calculation would be incorrect

  5. An Inspector has authorised a request not to capture the return details

  6. A return has been issued in error

  7. A return for an out-of-date year has been received within the relevant time limit but not captured on the Local Data Capture (LDC) computer system before the relevant annual April enhancements to LDC have been implemented

or

A return for an out-of-date year has been received provided

  • A return has been requested by issue of a notice under S8TMA 1970
  • No determination has been raised for the year of return
  • It is an original return and NOT an amendment

For further information, see SAM121080

  1. Tax deducted exceeds income received

2015-2016 onwards

From 2015-2016, Class 2 National Insurance will be collected through SA as part of the Balancing charge.

The Create Return Charge screen was updated to include:

  • A field for a Class 2 NICs amount which has been included in a Create Return Charge
  • A field for the current Class 2 NICs amount held by NPS. When an update to the Class 2 amount is sent to SA, it will be stored in this field. If there is a Create Return Charge for a year and SA receives a Class 2 update, an entry will be created on the `W061 – Class 2 NICs and Marriage’ worklist
  • A box for `Voluntary Class 2 NICs via SA’. You will need to select this box if you are using Create Return Charge for a year where the customer is below the Small Profit Threshold for Class 2 National Insurance but wants to pay voluntarily
  • A box for ‘No collection of Class 2 NICs via SA’. Where you are creating a Nil Create Return Charge you must select this box to notify the NPS/National Insurance service that SA will not be collecting Class 2 NICs through SA.

Further action is then required as the computer will not automatically:

  • Update the taxpayer’s return profile
  • Issue a Tax Calculation (Revenue calculation cases and self calculation cases where the return has been repaired)
  • Create work items
  • Make any repayment where claimed on the return
  • Set Mandatory review signals.

Further information is available for each of the situations in the following subjects

Situation Subject Reference
     
1 ‘Computer calculation is incorrect’ SAM121420
2 ‘Permanent cessation cases’ and Section ‘Permanent Cessation’ in business area ‘Special Cases’ SAM121510 and SAM90000 onwards
3 ‘Bankruptcy cases’ and Section ‘Bankruptcy’ in business area ‘Records’ SAM121270 and SAM106000 onwards
4 ‘Computer calculation is incorrect’ SAM121420
5 Follow the actions in subject ‘Computer calculation is incorrect’ SAM121420
6 ‘Capture of returns issued in error’ SAM121310
7 ‘Returns for out of date years’ SAM121080 and Action guide (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
8 ‘Pensions etc taxable on the amount accruing in the year (‘accruals basis’) SAM20050

 

Note: When using function CREATE RETURN CHARGE or CREATE RETURN CHARGE FOR ENQUIRY on a case where:

  • The Last SA Return Required signal is set for the return year or earlier

And

  • An amount was previously transferred to PAYE for that year.

The case will not appear on the ‘Reduction of Amount Coded Out’ Work List or be automatically notified to PAYE and any reduction in the amount coded on PAYE must be recognised and dealt with manually.