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
- Has anyone read the implications of the Lisbon treaty? 751 17
- Leaving Flat Rate Scheme for VAT 232 6
- Can I take action against my accountant for incompetence? 1,546 42
- CIC Company 382 2
- What are options for non CA firm 2,648 57
- Is this a scam? 754 8
- Companies Made Simple Dashboard? 113 1
- Employment allowance (again) :( 327 2
- Mortgage to buy property in limited company 234 5
- New company - form a group? 155 2
- Sage valuing foreign bank balances 173 4
- PITA client 213 3
- VAT on sales net of CIS suffered 364 9
- Do I need to report this to SOCA 3,311 33
- Dividend dates 489 8
- R&D tax credit claim 217 5
- CIS Deductions 271 3
- Estate agent and VAT registration 115 1
- is this fraud? 788 13
- Married woman dies owning marital home 496 5
- Property exchange - 8-year legal delay following fall-out 598
- Cancelled 345
- SAGE Payroll Data for Import to MS Dynamics AX 331
- Cancelled 282
- Have you staged yet for auto enrolment? 254
- Probiz 241
- VAT on non-profit making clubs (ECJ VS West Dorset Golf Club) 185
- Phishing emails purporting to be from CIPFA? 176
- Car leasing scheme 176
- Is this UK incapacity benefit taxable in UK or Jersey? 155