Moan re HMRC software

HMRC software not dealing with Cessation correctly

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I submitted clients SA100 on 15 December. Cessation of part time business was 31.12.21. Class 2 NI therefore was not a full year.

After Christmas recieved two items of post re client. (A )SA251 stating tax returns no longer required. (B )SA302 with a tax calculation showing Class 2 NI for a full year.

Phoned HMRC to day to be told that the System had not capture the cessation date, 'advisor was cross when I pointed out system has captured cessation for purpose of removing requirement for Tax Return, and said I had to deal with NI help line. He did transfer me to help line and I believe the adjustment has now been made.

The process took me 23 minutes. We spend far to much time navigating errors by HMRC, roll on MTD!

Replies (10)

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By ABC12
03rd Jan 2023 13:14

That's always been the way. When somebody ceases you need to use the online form to tell HMRC they've ceased self-employment. That's processed pretty quick and then when you submit the SA Return the NI will match

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Replying to ABC12:
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By rmillaree
03rd Jan 2023 13:32
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Replying to rmillaree:
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By CJaneH
03rd Jan 2023 14:37

Having followed the link the notes and the form relate almost entirely to tax and the only mention of Class 2 NI is for low earners to pay voluntarily. Reading this I would not know I need to submit the paper form to HMRC to instruct the NI department to instruct HMRC tax.

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By CJaneH
03rd Jan 2023 14:40

Having said the above, |I still; says thanks for your reply and link.

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Replying to CJaneH:
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By ABC12
03rd Jan 2023 14:57

It's not a paper form, fill in the form onscreen and submit, takes a couple of minutes.
Can't help some people.

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Replying to ABC12:
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By CJaneH
03rd Jan 2023 15:57

Sorry!!!! I only briefly looked at the form and I thought it required a signature.

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Replying to CJaneH:
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By rmillaree
03rd Jan 2023 16:21

"Having followed the link the notes and the form relate almost entirely to tax and the only mention of Class 2 NI is for low earners to pay voluntarily. Reading this I would not know I need to submit the paper form to HMRC to instruct the NI department to instruct HMRC tax."

I just dont get them confusion you have - it says they need to be told person is no longer sole trader - link takes you to form and form confirms cessation date. The lack of any specific advise ref why the form exists is not really relevant - they simply want you to complete the form and notify cessation date.

It seems reasonably common sense that they are asking the date "self employment ceases" so they can update the NI record though - so it shouldnt really come as a susprise - the NI flag has ALWAYS - for the last 20 years plus been independent of what goes on the tax return - so its never ben the case that entering start or cessation dates on sa returns has been acceptable - its ALWAYS been via other method like this.

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By Catherine Newman
03rd Jan 2023 14:49

You have to fill in the Cessation of Self Employment online form for it to go through to the NI system. I had the opposite problem. I filled in the cessation form and HMRC got the NI right but still issued an SA return. It was quicker for to file the return for free without other income as the API actually worked than to hang on the phone for an hour. I did this with another client too.

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By ireallyshouldknowthisbut
03rd Jan 2023 15:48

Its a complete dogs dinner.

Still doesn't work efficiently, what 7 or 8 years since it was changed?

Those dim minds at HMRC STILL have not worked out the system should be driven from the tax return into the NI system as those are going to be the best quality dates.

Its pathetic and must waste a huge amount of time for both HMRC and agents, not to mention the looming pension issue in a few years when the tax payer finds they have lost qualifying years as the Class 2 was never collected.

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Replying to ireallyshouldknowthisbut:
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By Catherine Newman
04th Jan 2023 09:57

It's about time they commissioned a review into it before people realise they have no pension entitlement. I have several clients who have their Class 2 thrown out but don't do anything when I address it with them.

The Treasury is actually turning away funds they should be collecting.

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