Another "opt out of SA" question
An individual is a British citizen, UK domiciled, but resident and ordinarily resident overseas. Her only UK source of income is rent derived from a property in the UK, which amounts to a constant net profit of £3K per annum (after mortgage interest), give or take a few quid, from which a UK personal allowance is deductible giving rise to no liability and wasted personal allowances of about £4K. She has a NRL scheme ref and receives the rent gross.
It seems to me that such an individual should be able to get out of the annual hassle of completing SA returns, but HMRC have rejected our request, citing a de minimis limit of £2500 above which their policy is to issue return notices even if normally covered by allowances. I have tried to find this in the manuals but run into problems.
One port of call was SAM101042 ("Criteria for auto removal of PAYE cases from SA"), to which a link was provided in another recent thread on a similar issue, and which I repeat here
This link is in fact totally irrelevant to my case because this individual has no PAYE record nor has had one in recent history. I only mention it in this thread because I find it surprising that there is no corresponding section that deals with auto-removal of taxpayers who do NOT have a PAYE record. I also find it odd that this page makes no reference to income from land or property, whether above or below £2500. If anything it is unhelpful to my case because in the final sentence it states that cases dealt with by the ex pat unit are excluded from auto removal.
So, although rather unsatisfactory, I have resorted to those SAM sections which deal with the requirement to SET UP a SA record, in the hope that if the individual falls outside that criteria, then there should be a case for removal.
There appear to be two links that deal with this, depending on whether the individual has a PAYE income source.
With PAYE source, SAM100050:
Without PAYE source, SAM100060:
The reference SAM100050 to PAYE sourced individual contains a reference to £2500 limit, but surprisingly SAM100060 does not, and instead implies that ANY amount of income from property requires an SA record for someone not under PAYE. I can see some logic to this: An individual with a PAYE source has the chance to have tax collected by PAYE coding restriction. On the other hand, an individual without a PAYE source is more likely to have surplus personal allowances to cover the untaxed income.. The final sentence in SAM100060 does refer the viewer to SAM100050 but does not expressly say that the same de minimis criteria apply.
So, I guess after all that my question is: Is there an argument that I can put to HMRC to prevent this annual fiasco for this client?
With kind regards
- What aspects of accountancy/book-keeping most trouble people 152 3
- Accountant software 417 11
- Accounting jobs in the UK 145 2
- Foreign income on Self Assesment 231 1
- Dividend paid to non-shareholder 204 4
- CIS gross status review 93 1
- Notes needed for a new partner in an LLP 126 2
- Dividend payments to spouses 358 6
- Flat rate vat error 246 5
- Whats the best way to keep my accounts? 138 5
- How do I clear transaction history - Sage 50 v9 147 2
- Whats the best way to keep my accounts? 90 1
- Property versus Trade in a Ltd Company 149 4
- When will Private Principal Residence Relief cut will start? 364 8
- Snotty HMRC letter - continued 626 17
- Dispensation pointless ? 272 4
- Accountant Pays Clients Tax 611 11
- Are bankruptcy restrictions order becoming more common? 206 4
- Charge out rates in London? 218 2
- Negative retained earnings & Dividends 187 3
- Desperately seeking Susan, Sam or anyone with any other name 756
- Experience with Islamic investor following Sharia-compliant rules? 485
- Darwinpay Partnership Assessment 299
- How to format a stock book 266
- S464A Charge to tax: conferring benefit & BIK 213
- Tax efficient holding company structure 203
- Outlook 2007 with business contact manager not loading on new laptop 196
- Investment property company accounts template 191
- auto enrolment - calculation of first pension deduction 173
- Sage 50 Customer Statements and Running Balances 162