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SAR, HMRC tipping off, or both

whats needed

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SA client with rental income, never showed up for the 19/20 tax return season, stating they didnt have income to declare

we disagreed on the basis that we had carry over records (rental statements) for the start of the year. a return wasnt filed and they were fined. the fine has now been removd and withdrawl notice issued for the tax return by HMRC, so it seems the client spoke to them advising no reason to file.

we've now dissengaged, but are a little unsure of what we should do in terms of reporting, is just an SAR needed or should the HMRC tipping off service also be used?

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By Truthsayer
04th May 2021 09:46

You must not tip off HMRC. You must file an SAR.

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By SXGuy
04th May 2021 10:22

Clients, who'd have em? Been chasing a client all of last year, and wrote again this year advising two years were due, heard nothing until today when i receive a letter from HMRC confirming removal of the requirement to file an SA for both years.

Don't have enough to suspect anything or file a SAR as client was a small time gardener so is possible he never worked. Still angers me that they dont even have the decency to telephone and explain. Perhaps ill send a bill for my time in writing letters and stamps haha.

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Replying to SXGuy:
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By I'msorryIhaven'taclue
04th May 2021 16:18

Quote:

...client was a small time gardener so is possible he never worked.

I'm trying to imagine what a big-time gardener might look like :)

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Replying to I'msorryIhaven'taclue:
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By Hugo Fair
04th May 2021 16:50

Charlie Dimmock?

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By rmillaree
04th May 2021 10:27

Have you got any certainty whatsoever that the individual met the "hmrc version" of the filing requirements for sa returns for 2021? Your post seems to ignore the important possibility that a return might not be necessary despite there being overlap income.
If income is below 10k and profit is below 2.5k for the year then hmrc are clear that no return needs to be filed - so the presence of income near the start of the year doesn't really prove anything IMHO.
If we look at the exact wording of what they have said you might still have suspicion as to whether there is income to report even if no sa return is needed. All i would say here is have you been clear that there is two issues here one ref filing sa returns (inland revenue version of) and another ref declaring income - in your post you have only mentioned the issue of tax returns.
Apologies if i am teaching you to suck eggs here but your initial question suggests you may have only have had limited data at the start of the year which would not normally be enough to prove a return is needed.

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Replying to rmillaree:
By Paul D Utherone
04th May 2021 14:22

Quote:

Have you got any certainty whatsoever that the individual met the "hmrc version" of the filing requirements for sa returns for 2021? Your post seems to ignore the important possibility that a return might not be necessary despite there being overlap income.
If income is below 10k and profit is below 2.5k for the year then hmrc are clear that no return needs to be filed - so the presence of income near the start of the year doesn't really prove anything IMHO.
If we look at the exact wording of what they have said you might still have suspicion as to whether there is income to report even if no sa return is needed. All i would say here is have you been clear that there is two issues here one ref filing sa returns (inland revenue version of) and another ref declaring income - in your post you have only mentioned the issue of tax returns.
Apologies if i am teaching you to suck eggs here but your initial question suggests you may have only have had limited data at the start of the year which would not normally be enough to prove a return is needed.


That rather depends on the former client not perpetuating the apparent myth to HMRC that they "have no income to declare" and HMRC just accepting that and taking them out of SA. Of course if they are out of SA you will never be able to tell what was said by the client, or done by HMRC, because detail for the year will no longer be available to the agent, and unless HMRC issue an informal computation to close the year and send an agent copy, who knows.

HMRC view regarding property income between £2.5k & £10k is after all just their view not legislation, and if you follow the online process through to check if you need a return - https://www.gov.uk/check-if-you-need-tax-return/y/no/less-than-50-000/ye... - you will end up with No, and a note to:

"...tell HMRC if you had:
- ...
- between £1,000 and £2,500 in any other untaxed income, such as commission or money from renting out a property"

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Replying to rmillaree:
By SteveHa
04th May 2021 15:22

Please don't quote HMRC's (incorrect) criteria on when a Return is required. If the taxpayer fails to meet the requirements on TMA S7, then there are likely grounds for withdrawal, irrespective of what HMRC's garbage says.

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Replying to SteveHa:
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By rmillaree
04th May 2021 16:51

"Please don't quote HMRC's (incorrect) criteria on when a Return is required. If the taxpayer fails to meet the requirements on TMA S7, then there are likely grounds for withdrawal, irrespective of what HMRC's garbage says."

I specifically didn't want to get involved in that discusion here hence my comments in brackets - all i was trying to do was point out to the op that based on what they were saying nothing was clear cut ref "requirement to do a return" and "declare" no more no less - ie imho the presence of one months rental income at the start of the year doesnt mean a tax return will be needed.

Note i tend to proceed from the point of caution too that if a return has been issued and hmrc's manual says they want a return then its not traditionally been as simple to cancel as one would like - so in the situation where a return has been issued (confirmed here! - albeit complicated by cancellation) IMHO and the hmrc manual says they want a return its quite right to default to one may be required to complete one position even though strictly spekaing the criteria may not have been met. Anyway that point is best left to another thread perhaps although i do understand why you have flagged up the issue.

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David Winch
By David Winch
04th May 2021 13:43

Certainly do NOT tip off HMRC. Do you have enough information to have a reportable suspicion to trigger the need for a SAR?
David

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@enanen
By enanen
05th May 2021 10:56

An educated suspicion is all you need to have to make a SAR.

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