Self Assessment if Foreign income is clients only income and its below annual personal allowance

Self Assessment and foreign income

Didn't find your answer?

Client returned to UK in 2013 after 40 years abroad.

Only income is £8,000 pa of foreign pension (swiss).

Received a request from HMRC to complete a tax return but ignored it because total income is less than the personal allowance.

Has now received fines from HMRC.

HMRC website says in one paragrapg you have you fill in a SATR if you have untaxed income of £2,500 or more; however further down the page it says you need to do a SATR if you had income from abroad that you needed to pay tax on.

Reading the second paragraph this suggests they only need to do a SATR if they have tax to pay which they don't!

Confused so spoke to HMRC who weren't sure either so they referred the question higher up and then advised a SATR was required.

Could anyone confirm the position and if a SATR is required and the fines stand is an appeal on the grounds that the HMRC website is contradictory and the HMRC person didn't know the answer reasonable grounds for an appeal?

Replies (6)

Please login or register to join the discussion.

By Tim Vane
24th Aug 2016 12:09

If HMRC requested a tax return, then a tax return is required. End of.

EDIT - unless they agree to withdraw the request, which you can ask them to do.

Thanks (0)
By Duggimon
24th Aug 2016 12:33

Exactly, the only relevant issue here is that a return is required if asked for, the client's income is irrelevant.

Thanks (0)
By Paul D Utherone
24th Aug 2016 13:15

If there is no liability then there is no need to register under s7 TMA

You are past that as HMRC have client set up and have requested a return under s8 TMA. You can ask to have the reuirement withdrawn under s8B(2) TMA and HMRC will consider the request and IF THEY DECIDE to do so issue a formal withdrawal unde s8B(4). Trouble is they decide based on their non statutory rules and you can be pretty certain that they will decide not to withdraw.

If they have now received fines then presumably the returns have been submitted, in which case you cannot request withdrawal because of s8B(3) TMA.

The problem with an appeal to Tribunal is almost certainly that having been required to make a return, and buried ones head in the sand rather than do something about it, there is very little they can do to overturn penalties as the legislation is black & white in that regard, They may have sympathy, but that will be lost with the failure to do anything when the request for returns was made

Thanks (0)
avatar
By soundadvice
24th Aug 2016 14:05

Client has not submitted his return yet but has received £100 + £600 (for May and June) late filing penalties (with £300 for July to follow).

Do you think we are better to ask HMRC to withdraw the request for a SATR under S 8 B (4) before submitting the tax return or does it not really matter any more?

Thanks (0)
avatar
By TDRtax
24th Aug 2016 14:16

Absolutely request withdrawal. If you are authorised, do it by phone to the ADL. I've found then pretty good with this sort of thing. Just highlight there was no requirement to notify under S.7, and there will be no liability arising from the Return as covered by PA.

However, double check your facts. £8k doesn't sound like much to live on.

Thanks (0)
avatar
By soundadvice
31st Aug 2016 09:52

Can HMRC refuse if you ask for a tax return request to be withdrawn? If so on what grounds can HMRC refuse the request if the tax return wasn't required in the first place (client does not have any income that will be taxed for 14/15 and no return for 14/15 has been submitted yet)

Thanks (0)