SAM101092 - Records: maintain taxpayer record: dormant records: making a record dormant (Action Guide)

From April 2015, a new function (RRSA) is available which can be used where a Notice to file needs to be withdrawn and the record needs to be made dormant. For further information, see ‘Automation of dormant record process’ at SAM101094. If you only need to make a record dormant, follow the action guide below.

If you want to make an SA record dormant consider steps 1 - 1 5 below. The guide is presented as follows

1.  Check SA Notes and Case Summary notes to ensure that the case is not working with Compliance, the Automatic Closure Inhibited signal may also be set in some cases. If the Enquiry signal is set you should refer the case to the Enquiry Officer for advice, in all other cases where the SA note indicates Compliance have an interest in the case you should follow the action in step 1 of SAM120116

2.  Use function AMEND TAXPAYER SIGNALS to

  • Enter the last year for which an SA return is required in the ‘Last SA Return Required For Year Ending 5th April’ field. If a return has been issued, this must be the return year
  • Use the Free Format Notes field to enter the reason that the record has been made dormant

Note: Where this action is taking place after the returns selection in February but before 5 April, the system will prevent you from setting the year to an earlier year than the year of the return selection

For example, return selection run in Feb 2012 to issue 2011-12 returns. The Last Return Required (LRR) must be set to ‘12’. Before the returns selection the year can be set to ‘11’

Note: If the record relates to a non-resident company landlord, you must leave the NRCL signal on the record even though the record is to be made dormant. Failure to do so will cause problems within the Citizen Identification Framework. You should not reactivate a dormant non-resident company landlord record if the income as a landlord has ceased but the taxpayer needs to be brought into SA for other reasons. Instead, you must use function SET UP INDIVIDUAL TAXPAYER to set up a new record and use function MAINTAIN SA NOTES to record the existence of the UTR of the dormant NCRL record

Partnerships

3.  Record the cessation date on the partnership record

  • Use function MAINTAIN TRADE to enter the date of cessation against the partnership trade source, (a partnership can only have one live source assessable to a charge on trade profits on the taxpayer record)
  • Use function MAINTAIN PARTNER to enter the date of cessation of the partnership source. Where access is not possible, notify the office responsible for each partner’s SA record of the date the partnership ceased. You must quote the partnership UTR. Those offices will use function MAINTAIN PARTNER in each case to enter the date of cessation of the partner source

4.  Where possible, you should update the individual partner’s record. To do so

  • Make a note of the UTRs of all of the partners
  • Select the ‘Sources’ screen in the Individual record for each partner and update to show the cessation date of the partnership source

Note: If the partnership source is the only reason for inclusion in SA, after updating the Sources screen, remember to close the individual partners’ record down following the above steps

All cases

5.  Inhibit the ‘Exit’ letter in cases where there is an outstanding return which is no longer required. A separate letter will need to be sent depending on the circumstances. For example, SEES letter SA789 will need to be issued for 2010-11 and 2011-12, and SEES letter SA832 (Withdrawal notice) needs to be issued for tax years 2012-13 onwards (see SAM120115 onwards)

6.  Use function MAINTAIN PAYMENTS ON ACCOUNT to reduce the current year’s payments on account to nil only if

  • The case ceased to fall within SA during the previous year, and
  • The SA return for the year of cessation has already been received and captured

Note: Strictly the taxpayer should make a claim to adjust (reduce) payments on account, but a practical approach is recommended provided the two conditions above are satisfied

In other cases

  • Take no action regarding the current year’s payments on account

7.  Check for any outstanding SA work list entries and work the entry, where possible

8.  Check the statement for any remaining credit

  • If there is no credit on the record, go to step 10 onwards
  • Where there is a credit, proceed

9.  Where the record shows a ‘No Repayment’ or ‘Deceased’ signal or there is an SA Note which indicates a repayment should not be made

Check the reason for the signal being set

  • For Deceased cases
  • Contact the DMB Deceased team using the ‘DMB, Estates and Trust Office’ mailbox for authority to proceed with the repayment (DMB will remove the PCA/No Repayment signal if authority is given)

10.  Where there is no signal preventing repayment, or the ‘No Repayment’ signal is set and no longer applies remove the signal, and repay. To do so

  • Check the last completed tax return and if bank account details are shown, use that information to repay
  • If no bank details are shown, repay by Payable Order

11.  If the reason for the signal still applies, take no further action

12.  Make a full SA note to record the circumstances under which the record is being closed

13.  Where there is a PAYE record update the information held on IABD and Coding screens on the PAYE record. For further information, see PAYE130000 onwards for IABD and PAYE10000 onwards for Coding updates

14.  Where there has been a self employment source, for tax years 2015/16 onwards, it is essential to close the Class 2 record. Therefore you should

  • Send an SES referral form(This content has been withheld because of exemptions in the Freedom of Information Act 2000), showing the appropriate information and state that the SA record has been closed because the self employment has ceased in Notes section on the form

15.  For tax years 2010-2011 onwards, refer to ‘Withdrawing a notice to file’ (Action Guide) at SAM120116 for actions to take to update the accounting record and cancel incorrect penalties

16. Where there is an in year captured tax return on the dormant record, it should be unlogged and captured on the correct live record as per the following instructions and in SAM 121640

  • Take screen prints of the return
  • Log and batch it
  • Capture it to the correct record
  • Unlog the original return
  • Review statement for Over repayment charges/underpayments resulting from the move and deal with it accordingly
  • Repeat if there is more than one in date year.
  • If Return is an Out of date year then they will create return charge and unlog the old return but be wary of any consequences that may bring. This may then fall into the remit of a Tech band O