Permanent cessation: permanent cessation: emigration
Clerical procedures following the departure from the UK of a taxpayer are largely unaffected by the introduction of SA. Detailed guidance is given in the PAYE Manual at PAYE81640 to PAYE81700.
When informed that the taxpayer is leaving the UK to live, or work, abroad it will be necessary to update the SA record in accordance with the Action Guide at SAM90021. Specific SA aspects are summarised in this subject.
Claims to provisional cessation repayments made by taxpayers leaving the UK should be dealt with in the same way as in pre SA years. This means that a claim to a cessation repayment should be considered in all cases and may be dependent upon the completion of an in-year return.
Where an SA customer submits a form ‘P85 - Leaving the UK’ and does not satisfy the condition that he/she is leaving the UK to work full time abroad for at least a complete tax year for a UK based employer, the form P85 should be rejected if there is a continuing source of UK income. You should advise the customer that, as he/she has a continuing UK source of income, the SA return issued at the end of the tax year should be completed in the normal way. However, if all sources of UK income cease on departure, an early settlement return can be issued if requested, see SAM90021 for further information. The receipt of a form P85 may be treated as a request.
Issue of tax return
After notification of the departure from the UK of a taxpayer, the Manual Return signal should be set on the taxpayer’s SA record.
In February of each year the computer will check whether an SA return should be issued automatically in the following April. If the Manual Return signal is set the computer will not automatically issue a return but will include the case on the ‘Returns Review’ Work list. See subject ‘Manual Issue of Return: Manual Return Signal’ (SAM125100).
Where the taxpayer returns to the UK before the end of the tax year in which he / she departed the UK a SA return for the full year should be issued in the following April.
In SA, liability for the year will usually be established upon submission of the SA return issued at the end of the year. However, a request may be received during the year to settle the taxpayer’s liability (including any earlier year’s liability) following the permanent cessation of all sources of income and gains liable to UK tax. The receipt of a form P85 may be treated as a request.
Wherever possible the return should be issued at the end of the year in the normal way. The issue of an in-year return should be restricted only to those cases where early settlement is requested. A Short Tax Return (SA200) should not be issued in such cases.
Where early settlement is requested there should be no suggestion that the in-year return has been ‘accepted’ or that it is ‘satisfactory’. Early settlement can only be regarded as ‘provisional’ in a departure from the UK case because of the possibility of the taxpayer returning to the UK before the end of the tax year in which he / she left and further liability arising.
Following the submission of an in-year return the liability may be calculated and you can
- Repay any excess tax deducted (or paid)
- Determine any liability due
Note: Determination of the taxpayer’s liability may still result in the agent or personal representative wishing to settle the outstanding liability at the normal due dates.
Estimated expenses / taxable benefits
Estimates can be used in the completion of the in-year return where the taxpayer is unable to provide actual details of expenses and / or taxable benefits. However, it should be made clear that calculation of the liability can only be regarded as provisional until the actual figures are known.
Student Loan cases
If you receive a claim for early settlement and the taxpayer is a Student Loan Case, refer to the Collection of Student Loans (CSL) Manual for details of how to deal with the Student Loan.
A nominated Officer should be nominated to supervise cases of early settlement. He / she will be required to
- Authorise the issue of an in-year return
- Ensure the necessary manuscript amendments are made to the return
- Examine the completed return
- Consider the position regarding any enquiries arising under Section 9A TMA 1970 (as inserted by FA 1994)