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

This guidance applies to tax returns for 2009-10 and earlier. Further guidance for tax years 2010-11 and later will be published shortly.

If you want to make an SA record dormant consider steps 1 - 20 below. The guide is presented as follows

Making a duplicate record dormant Steps 1 - 4
Making a record dormant in the absence of a usable address Steps 5 - 6
Making a record dormant in the Debt Management office Steps 7 - 8
Making a record dormant where the Potential Removal Case signal is set Step 9
All other circumstances - initial action Step 10 - 15
All cases Steps 16 - 20

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

Making a duplicate record dormant

1. Consider whether an ‘Exit’ letter (SA251) should be issued to the taxpayer. If you wish to inhibit the automatic issue of the letter set the ‘SA Entry / Exit Letter Inhibited’ signal using function AMEND TAXPAYER SIGNALS
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 on that record
 
    • The reason that the record has been made dormant
 
    • The Unique Taxpayer Reference (UTR) of the SA record that remains live
3. If a return has been issued from that record
 
  • Advise the taxpayer in writing of the UTR of the return which is to be completed, that this is the correct UTR which should be used in any future correspondence with HMRC and the reference against which they should make their SA payments
 

And, in respect of the incorrectly issued return
 
  • Use the following Action Guides in the ‘Returns’ business area for Individual, Trust and Partnership Returns, as appropriate
 
    • Individuals: ‘Capture of Returns Issued in Error’
 
    • Trusts: ‘Return Charge to be Created for Return Issued in Error’
 
    • Partnerships: ‘Returns Issued to Partnership From Two Separate SA Records’
  Note: On receipt of the completed (correctly issued) return, log and capture it in the normal way
4. Use function MAINTAIN COMPLIANCE SIGNALS to check if the Construction Industry signal is set. If it is then
 
  • The signal will remain on the dormant record
 
  • Where there is a live duplicate record ensure you set the signal and inform the CIS team of the new UTR

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Making a record dormant in the absence of a usable address

5. 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
6. If a return(s) has been issued from that record, but not filed
 
  • Use function CREATE RETURN CHARGE to enter a nil charge (or a charge equal to the payments on account or determination) for any year for which a return is outstanding
 
  • Add to your Free Format Note the fact that a ‘nil’ charge (or charge equal to the payments on account or determination) has been entered for a particular year(s) in the absence of a usable address

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Making a record dormant in the Debt Management office

7. Where the cessation return has been filed and you are satisfied from the responses to your questions that the taxpayer has ceased in an earlier year and later years returns are outstanding you should
 
  • Consider whether an ‘Exit’ letter (SA251) should be issued to the taxpayer. If you wish to inhibit the automatic issue of the letter set the ‘SA Entry / Exit Letter Inhibited’ signal using function AMEND TAXPAYER SIGNALS
 
  • Use function AMEND TAXPAYER SIGNALS and set the last year for which an SA return is required in the Last SA Return Required For Year Ending 5th April field. This must be for the last year a return was issued
 
  • Enter a nil charge for all the years following that in which the taxpayer ceased, using function CREATE RETURN CHARGE
 
  • Retain any monies paid for any penalties for post-cessation years. Only repay these monies if returns for the appropriate years are subsequently filed, subject to normal rules
 
  • Reallocate any monies paid to Permanent Overpayments (POP) in OAS using function TRANSFER OVERPAID BALANCE
8. Once you have made the case dormant you should
 
  • Issue SEES letter SA642
 
  • Note your actions and the reason for them in SA Notes using function MAINTAIN SA NOTES
 
  • Advise the Service Office that you have made the case dormant and issued SEES letter SA642. Provide any details of employment / unemployment and any other relevant information obtained from the taxpayer
 
  • Arrange for the statement to be inhibited. See subject ‘Inhibition of Statements’ (SAM131030)

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Making a record dormant where the Potential Removal Case signal is set

9. Where a return is captured after the Annual Returns Selection has taken place and the record meets the criteria for automatic refinement, the Potential Removal Case signal is set. If you are satisfied that there is no requirement to complete the following years return then follow the points below
 
  • Create a ‘Nil’ return charge
 
  • Cancel any penalties issued for the year
 
  • Use function MAINTAIN SA NOTES and make a note of your actions and why
 
  • Set the Last SA return Required signal to the year of the return just captured
 
  • Set the SA Entry/Exit Letter Inhibited signal
 
  • Delete the entry in the Potential Removal Case signal
 
  • Issue the SEES letter SA642
  Further information is available in section ‘Individual Returns’, subject ‘Capture Of Returns Issued In Error’ (SAM121310).

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All other circumstances - initial action

10. Review the case to identify any outstanding returns or information
11. If there is an outstanding return or outstanding information, inhibit the issue of the ‘Exit’ letter (SA251) by setting the ‘SA Entry / Exit letter Inhibited signal’ using function AMEND TAXPAYER SIGNALS
12. Issue the SEES letter SA645, copied to the agent where appropriate
13. Make the relevant SA Notes
 
  • Use function MAINTAIN SA NOTES to make an SA Note of the actions you have taken, to state what is outstanding and to confirm you have requested it
 
  • From the SEES Notes Paster select the SA Note (Record made Dormant (date / reason for actions including last year SA and reason for removal))
14. Consider in other circumstances whether an ‘Exit’ letter (SA251) should be issued to the taxpayer. If you wish to inhibit the automatic issue of the letter set the ‘SA Entry / Exit Letter Inhibited’ signal using function AMEND TAXPAYER SIGNALS
15. 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
  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 you 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 and UTR of the dormant NCRL record

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All cases

Consider steps 16 - 22 below 

16. 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
17. Enter on the SA record the date the source ceased, if not already done
 
  • Using function MAINTAIN PARTNER, if the source of income is a partner source
 
  • Using function MAINTAIN TRADE, if the source of income is a trade
18. The link between the SA record and any linked PAYE record, will be broken automatically
19. Ensure the PAYE record contains the current Agent details
20. Use function MAINTAIN COMPLIANCE SIGNALS and if the Construction Industry signal is present update the CIS computer record, refer to the CIS Manual for detailed instructions

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