SAM101090 – Records: maintain taxpayer record: dormant records

Once an SA record has been set up it will remain on the SA database indefinitely. It can be made dormant, by preventing the issue of future SA returns, but is still available to re- activate if required at any time.

An ‘Exit’ letter (SA251) will be automatically issued to the taxpayer and any acting agent when the Last Year Of Return signal is set. If the address is RLS or the taxpayer is deceased or where an SA record relates to a person or body that has been appointed to act in a capacity for the taxpayer, for example Executor or Official Receiver, the ‘Exit’ letter will not be automatically generated. Where you make an SA record dormant for a capacity case you will need to write to them explaining your actions and where a 64-8 is held you should send a copy of any letter issued to the agent.

The issue of this output can be inhibited by setting the ‘SA Entry / Exit Inhibited’ signal.

On making a PAYE main source case dormant for a taxpayer with a PAYE record graded ‘RE’, who has a continuing PAYE income source, you should

• Change the grading to ‘RO’

And, unless there is a reason for it remaining a file case

• Replace the FILE signal with the FILE-IN-DR signal

It is common for an SA record to be made dormant in the absence of a usable address for the taxpayer. When an address is RLS the Tracing Unit at Banking Operations with accounting responsibility will be asked to trace a later address. See subject ‘Address RLS’ ( SAM101030) in this section.

Where no later address is found, the Tracing Unit will set the Last Year of Return signal and ask the office with responsibility for processing work to

• Enter a nil charge, or a charge equal to the payments on account, on the SA record for any year for which a return is outstanding (to clear the reason for an RLS Cases work item)
• Make the SA record dormant

Where there are outstanding debts, the Tracing Unit or Debt Management office will remit the debts under Class 1 (Gone Unknown).

Note: If you are notified of the taxpayer’s new address at a future date it is important to consider re-activating the case and asking the Debt Management office to review the Class 1 remission.

DARM Cases

A record can be made dormant at the pursuit of returns stage in the Debt Management office where

• The taxpayer claims to have ceased to receive trading and / or other income and is not liable to SA, and
• The recovery officer is satisfied that the return for the year of cessation has been received and completion of subsequent year(s) returns is not required

It is possible to maintain a taxpayer’s personal details on the SA record even though the computer record is dormant. When maintaining dormant records you must consider whether the record should be re-activated.

When a dormant record is re-activated the taxpayer’s details held on the SA record may be out of date. It is therefore important to review all aspects of the SA record and update the details if necessary. In particular the PAYE record should contain the latest Agent details.

Overnight the CID framework is notified of an SA record that has been re-activated. If there is a known PAYE record for the taxpayer the employer reference will flow back to update the SA record and the UTR will flow to PAYE to update the record.

Revenue Loss

A dormant record will hold details of any remissions or write-offs made. Function VIEW STATEMENT will display the message ‘Please note there is a remission posted on this account’.

You will need to consider whether the remission or write-off has any bearing on your proposed course of action, and / or whether the remission or write-off should be cancelled.

The classes of remission or write-off where cancellation is most likely to be necessary are

• Class 1 - Gone unknown
• Class 4 - Not worth further pursuit
• Class 7 - Gone abroad

On re-activating a dormant record that holds remissions or write-offs (the advisory message will be displayed as above), the office with responsibility for processing work should ask the Charge Remitter in the Debt Management office to review these for possible cancellation.

Payments on account

If there was no SA liability for the year previous to the year for which you want to re- activate the SA record, you need take no action concerning payments on account.

If the year for which you want to re-activate the SA record immediately follows the last year for which there was SA liability, you must review the payments on account. In this situation the taxpayer is liable to make payments on account based on the liability shown on the return for the previous year.

Where those payments on account have been reduced to nil, because the source ceased, you will have to restore them. The source giving rise to those payments on account has no relevance. The onus is on the taxpayer to claim a reduction if he / she believes the sums due are excessive.