SAM31011 - Compliance: enquiry work: failure to notify cases where no S9A enquiry (Action Guide)

Where a S7 TMA 1970 penalty is chargeable on an individual, pension scheme or trust in a failure to notify case and you decide not to open a S9A enquiry follow the instructions in Enquiry Manual and steps 1 - 14 below. The guide is presented as follows

Initial action - Steps 1 - 4
Taxpayer agrees to contract settlement - Steps 5 - 6
Contract settlement paid in full - Steps 7 - 9
Taxpayer does not agree to contract settlement - Steps 10 - 14

For details of how to access any of the SA functions, select ‘Index of Functions’ on the left of the screen.

Initial action

1. Use function AMEND TAXPAYER SIGNALS to record in the Free Format Notes field that ‘S7 penalty imposed for 200-/– (and any other years)’

2. Use function MAINTAIN RESPONSIBLE OFFICE to set the Automatic Move (SAM31070) status to ‘N’ to inhibit automatic transfer of your responsibility for the taxpayer during a bulk transfer of SA records

3. Use CQI Workbench function ADD REASON FOR NO ENQUIRY to record an appropriate reason for not opening an enquiry

4. Write to the taxpayer and agent to

  • Draw attention to the offence
  • Put forward your proposals for settlement including the abated penalty

Taxpayer agrees to contract settlement

5. If surcharge has been imposed on duties subject to tax geared penalties, then provided the surcharge is unpaid

  • Use function MAINTAIN SURCHARGE to cancel it

Note: If the surcharge is already paid do not cancel it, give credit for the payment in the contract settlement (SAM31060). Likewise, give credit for any interest charged on the surcharge which has been paid

6. If the contract settlement includes unpaid payments on account and a balancing charge on the SA record

  • Use function MAINTAIN STANDOVERS to informally holdover the liability

Contract settlement paid in full

7. If payments on account and / or balancing charge(s) are stoodover informally on the SA record because they were included in the contract settlement

  • Use function CREATE INFORMAL DISCHARGE for the year(s) to informally discharge the total amount of the heldover payments on account and / or balancing charge for that year(s). Add a suitable note in the Free Format Notes on the SA record about the settlement

8. Use function MAINTAIN RESPONSIBLE OFFICE to set the Automatic Move status to ‘Y’ unless some other reason exists for inhibiting automatic transfer of your responsibility for the taxpayer during a bulk transfer of SA records

9. Advise the appropriate Local Compliance Manager when the contract settlement is paid

Taxpayer does not agree to contract settlement

10. Use function AMEND TAXPAYER SIGNALS to enter ‘Y’ in the Priority Collection Action field if you consider the late notified liability is a high risk debt. After setting the signal use function MAINTAIN SA NOTES to record the reason for setting it

11. Obtain authority from Authorising Officers within CPTT or Local Compliance to take formal penalty action

12. After formal determination of the penalties

  • Complete form 394(IT/CT) for issue with a covering letter explaining why the penalty is being imposed and that it is liable to interest if paid late. (Form 394(IT/CT) available on SEES)

Note 1: Include a payslip using the Print Payslip application. Enter the UTR, followed by a K (for example, 8257235884K), in the ‘Reference’ field and complete the other fields as necessary

Note 2: On completing form 394(IT/CT) do not give it a PEN reference but instead enter the taxpayer’s

  • UTR, or if the taxpayer’s SA record is linked to a PAYE record
  • NINO
  • Use function CREATE SUNDRY CHARGE to enter the penalty on the taxpayer’s SA record. The due date will be 30 days from the date of issue of the notice
  • Use function MAINTAIN SA NOTES to record the type of penalty - ‘S7(8) Pen’
  • Use function MAINTAIN SURCHARGE to cancel surcharge imposed on the liability on which the penalty is based. This action will also cancel any interest charge raised on the surcharge

13. Use function MAINTAIN RESPONSIBLE OFFICE to set the Automatic Move status to ‘Y’ unless some other reason exists for inhibiting automatic transfer of your responsibility for the taxpayer during a bulk transfer of SA records

14. Advise your Compliance Manager that the case has been concluded