PAYE79095 - PAYE operation: targeted review forms: review form suggests SA case required

The information on the review form may show that the taxpayer should now be within SA, for example, because an allowance or deduction exceeds the SA threshold for the first time. Note: With effect from 6 April 2004 evidence of higher rate liability is not in itself a criteria to be dealt with in SA.

Where this happens, you need to decide

• Whether a SA return is needed for CY-1

Or

• Whether the case can be dealt with outside SA for CY-1, with no SA return being issued until next year

It is not possible to have precise rules covering every situation. The aim should be to clear CY-1 by correspondence whenever possible, issuing SA returns for CY-1 and earlier only where it is essential for the purposes of ascertaining or computing liability or because the tax cannot be collected outside SA.

Issue an SA return where

• You receive notification of chargeable gains, unless it is clear that any gain will be covered by the annual exemption limit or the tax due can be coded out
• There is an underpayment for one year which exceeds the figure you are allowed to code out. This applies whether the underpayment covers one or more years. An SA return will need to be issued for each year for which a P800 has been issued

Deal with without issuing an SA return for CY-1 where

• Only existing coding allowances or deductions now exceed the SA threshold in CY-1
• New items above the threshold are straightforward ‘one-off' liabilities such as CG where the overall tax payable is clearly going to be within the limit for coding out

Where a SA return is issued for CY-1, any decision about earlier years is the responsibility of the SA caseworker who should deal with any underpayment or overpayment regardless of whether the taxpayer would or would not have been a SA case then.