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HMRC internal manual

Self Assessment Manual

Transfer of liability: transfer from PAYE to SA: non-SA stranded underpayments


  • A non-SA taxpayer ceases PAYE to become self employed and an underpayment remains to be collected


  • A non-SA taxpayer has been issued with an informal calculation (form P800(T)) for one or more tax years and it is not possible to collect the underpayment through PAYE


  • The taxpayer does not agree to meet the liability voluntarily

    • Issue an SA return for each year for which a P800(T) has been raised. Note: You can only issue an SA return if the year of the underpayment is still in date. A return cannot be issued later than 23 December three years after the end of a tax year. For example a 2006-2007 return cannot be issued after 23 December 2010

For further information, see subject ‘One or more tax year PAYE cases’ (Action Guide) (SAM140021)

Further guidance on PAYE underpayments is provided in the PAYE Manual, business area ‘Reconcile Individual’, section ‘Underpayments’ (PAYE90000 onwards).