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
- When to recover vat on bad debts 107 4
- Can't find a good web address 156 3
- Sage Line 50 - create custom remittance advices 182 7
- Timesheet and travel expenses software for engineering consultants 204 5
- effective advertising 228 6
- Nominal Code for Car lease? 184 8
- Software recommendations 311 2
- Cloud Based Software recommendations please 145 3
- Edible spam? 802 16
- I'm thinking of moving to Ireland 299 5
- Put fees on website 281 6
- Director resignation 216 4
- s75 ICTA88 Management expenses - idiots guide 1,540 27
- Mobile phone and P11D 1,324 4
- Sigma Red 1,412 3
- CIS Software Recommendations 341 5
- VAT on medical/care services? 107 2
- Definition of "relative" in benefits code 182 2
- Live Chat on Accountancy Website 451 6
- Should we let the Client Call the Shots? 518 7
- Straight line write off of Purchase Goodwill ??? 477
- Has anyone been affected by the RBS payment breakdown? 464
- WIP Software 336
- No payroll scheme in place 288
- Is there anything wrong with this? 258
- Do subcontractors on work for residential (student accomodation) construction 252
- Small Part Disposal of Property 228
- Uncommercial property business 221
- Apple Employees - RSU vesting and tax witheld 192
- SA Penalty 181