R40 or full return?

R40 or full return?

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Client, receiving refunds of £1k or so per year, has now been advised that SATRs will not be issued in future. But SATR's, unlike R40's, can be filed electronically with benefit of immediate refund.

Does anyone know if R40's are to be filed by internet in future or should we instead request that all R40 cases are brought into SA? (Using 3rd party software should mean no difference in the workload required to complete the form)

I guess the only downside is that R40 clients tend to be elderly and one wouldn't necessarily want to impose otherwise unnecessary penalty deadlines on them. Nevertheless it seems unfair that an SA taxpayer can get an immedate refund whereas an R40 case, who is probably more in need, has to wait.
David Lochhead

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By AnonymousUser
07th Sep 2005 09:03

I have often been told
without specifying the authority, that a taxpayer can insist on being dealt with under the self-assessment system. I have often asked for that authority (sometimes as I recall in this forum) but not yet received one. Is this an urban myth?

Certainly it would be interesting to know what the effect would be if you submitted an SA100 return for a client who had been issued with an R40.

There have been other occasions (not R40 cases but liability cases) where we have submitted SA100 and SA800 returns despite that no notice to file has been issued, and in response we have received letters saying that they will be accepted as if they had been in response to a notice to file. These have been paper submissions rather than FBI, and sometimes without even having a UTR at the time. At least in your cases it would appear that the client has a UTR, even if HMRC intends to render it dormant. It would be interesting to know if you FBI a return for that client instead of the R40 whether the refund would be delayed.

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By andymeeson
07th Sep 2005 11:31

Not so much an urban myth, Clint...
... more an attempt to draw reasonable conclusions from an unreasonable fact pattern!

Problem is, the legislation is deficient. It is written on the tacit understanding that nobody would ever voluntarily enter the SA world.

Accordingly, we have s.7 which says that you must notify chargeability if you owe tax and HMRC doesn't serve a return notice; and we have s.8 which prescribes what we must do if HMRC does serve a return notice. The one permutation which isn't mentioned by the legislation is if you don't owe tax but still want to file an SATR.

That's why, if you spontaneously file an SA100, HMRC has to pretend you did it in response to a s.8 notice: otherwise, they would have no legal mandate to process it or even acknowledge its existence!

In practice, therefore, what invariably happens in these cases is that HMRC will accept the SA100 but try its damnedest to persuade you not to send one in the next time. Hence the quasi-urban myth that you can insist on SA: in strict legal terms you can't, but in effect you can...

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By AnonymousUser
07th Sep 2005 11:46

UTR seems to be the key
I always try to get a UTR for a client, removing the need for R40s (I always use the SA100, filed by internet, if there is a choice).

But is a taxpayer automatically entitled to be issued with a UTR? This comes back to 'urban myths'. Longbenton recently argued that a UTR was not needed for one of my clients because there was no requirement to submit a tax return. My counter argument was that I wanted to be able to view the tax history online, which I could only do if client had a UTR. Not sure if that's correct but it seemed to work!

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By a.watson2
07th Sep 2005 14:05

FBI for repayments
In my experience, if the Inland Revenue has issued a return, but then decided that the client need not complete a return, they will input a nil return onto their system. If you subsequently try to file a return by FBI, it will show as accepted on the government gateway system, but not go through to the district - so refund does not come through. This happened to me last year, when the client in question actually owed £200,000 tax (due to large capital gain in year). He should never have been taken out of SA and I rang them to say so, when I got the notification. It was only when he got his statement and queried why there was no tax showing (return submitted in September)that we discovered the problems with the IR system. I couldn't (and still can't)understand why there wasn't an error report which identified returns that had been accepted at the government gateway, but not gone through to the district. In my previous existence as an auditor, twenty years ago, systems produced exception reports as one method of control.

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