How to stop being required to complete self assessement (retired, formerly self employed)

Stop self assessment

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A relative of mine who is in receipt of a couple of occupational pensions, state pension and trivial amounts of taxed-at-source interest got stung for £100 this year when he discovered that he had been required to submit another self assessment return despite (mistakenly) believing that having disclosed the closure of his small self employed income stream in the previous year he had been removed from the requirements.  He can't quite remember whether he had this formally acknowledged (he has no record, and neither do HMRC) and doesn't remember a notification to complete a return coming through, but at 70+ these things may pass him by anyway.  He's now completed the overdue return, plus the 15/16 return so is fully up to date.  What steps does he need to take to have himself removed from the self assessment requirements so he doesn't get fined again?  (Asking as I don't deal with personal tax myself, so not something I have much knowledge of).

Thanks in advance!

Replies (6)

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By Tim Vane
31st May 2016 14:17

It's a shame that he submitted the return as it would have been cheaper to ask for it to be withdrawn, then the penalty would also have been withdrawn.

Never mind, what's done is done. He should just phone HMRC asking them to remove him from SA - they will ask a few questions, and if he meets the criteria they will withdraw the requirement for future returns.

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Replying to Tim Vane:
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By larkim
31st May 2016 14:59

He tried that apparently - was told that he couldn't do anything about it and that he couldn't do anything about his SA status until he was fully filed for the overdue year!
Thanks. I'll pass on the advice.

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Replying to larkim:
By Paul D Utherone
01st Jun 2016 09:57

That is the second time I have heard on here that HMRC have told the client or agent that they cannot consider removing the requirement to submit until the requested return is submitted!

As Tim says, because the return has been submitted you are no longer in a position for make a claim to cancel the return - and thereby the penalty - under s8B TMA. But if you/the client initially rang and tried to get the requirement to submit the return removed - effectively a claim under s8B TMA - and was given erroneous information by HMRC ("submit the return and we'll think about removing you from SA based on that") then an appeal and request to review the penalty charge would seem in order. Possibly a FOI request for telephone call logs from HMRC to prove their error will be required.

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Euan's picture
By Euan MacLennan
31st May 2016 17:01

Tell your relative to appeal against the penalty on the grounds that:
(a) all his income had tax deducted at source, so there was no need for him to submit a tax return for 2014/15, and
(b) he never received any notice to complete a tax return.

HMRC are currently being lenient in these cases and may well cancel the penalty.

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Replying to Euan MacLennan:
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By larkim
13th Jun 2016 06:39

He was going to accept the £100 penalty, until he filed the outstanding return and was promptly served with a notice for a further penalty of £320 for being 32 days overdue past the three month window (he didn't know about that time period, and I didn't either unfortunately). So now he is definitely minded to appeal.

SA return for 2013/14 reported no income from self assessment, which is why I think there was no expectation from anyone that there'd be a requirement for a 2014/15 return (or beyond). The income he was declaring previous to that was only about £1500 p.a. anyway, so it was never much tax due in any event, which is why it is even more galling for it to be costing £420 (£100 original penalty plus new penalty) for what is an oversight / [***] up.

Appeal seems to be the best option, if a phone call to them won't get it set aside.

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RLI
By lionofludesch
13th Jun 2016 09:25

Sure we all saw these stupid cases coming when the penalty stopped being limited to the tax owed.

That safeguard needs to be reinstated. There was no good reason for change.

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