Working Together Issue 8

 

Joint Review of ITSA Enquiries

Following the publication of the report of the joint Inland Revenue and Chartered Institute of Taxation review in October 2000, it was agreed that we would look in detail at a number of areas that were causing concern. The procedural areas examined were

  • Opening letters, in particular their length,
  • Requests for private bank account details,
  • Requests for interviews at an early stage of the enquiry, and
  • `Faster Working'.

The first part of the work was focused on ascertaining the prevailing practices and views of Inland Revenue staff in the above areas, and how that compared with what our training, guidance and Codes of Practice ask them to do. As part of the review we selected nine Network Offices to visit during March 2001. We talked to groups of enquiry caseworkers and managers, reviewing a selection of enquiry cases, learning what factors gave rise to complaints, and looking at opening letters. In addition to identifying areas of good practice we were also looking to identify working methods to be avoided.

The review concentrated on practice in connection with full enquiries.

The second part of our work involved talking to groups who represent agents and unrepresented customers to understand the impact on them of current Revenue practice, and to gain more information about how we can work together to achieve an enquiry system that is fair to everyone involved.

Subsequent to the Office visits two workshops were arranged, one for operational Revenue staff to validate our understanding of the comments made at each of the visits and a further workshop for representative bodies to report findings, review progress and ensure that the major issues had been captured and understood. Summaries of these workshops were widely distributed for comment.

Arising from this consultation and discussion process we have formulated a framework within which ITSA enquiries will be worked and to which professional advisors will be encouraged to adhere. The framework proposal received general approval from the external representative bodies on the Revenue's Operational Consultative Committee (OCC).

Framework for ITSA Enquiries

Faster working

The scheme should be formally withdrawn. Both enquiry staff and agents should be encouraged to work within a 15 day turnaround time, where this is not possible or circumstances dictate, enquiry staff and the profession should be encouraged to agree their own timetable at the beginning of the enquiry to take account of one another's needs or difficulties.

Opening letters

Content

Whilst we should aim for national consistency, we will encourage enquiry staff to adopt a less formulaic approach to opening letters. We would want to see enquiry staff thinking more about the particular items/ information required in individual cases. We will still expect the letter to request appropriate books and records possibly including items which were not used in preparation of the accounts but which are relevant and can reasonably be required in checking a return e.g. appointment diaries. Enquiry staff should not ask for details of investments not required to be shown on the return e.g. ISAs/PEPs at this stage of the enquiry unless means have been identified as a risk.

Time Limits

We will encourage enquiry staff to agree a time limit for response (normally 30 days) but to show a flexible approach where warranted.

Copying opening letters to customers

There was a low response to the Working Together article on this subject (12 responses) and they were equally divided. We therefore propose copying the opening letter sent to agents, to their clients with the S9A notice for an initial period of 6 months. We would like to monitor and review the response at the end of this period and it would be helpful if OCC could contribute suggestions for a suitable method of evaluation.

Letters to include identification of full/aspect

We will make it clear in the opening letter whether the enquiry is a full enquiry or into only aspects of the Return. The letter will make it clear that aspect enquiries may become full enquiries.

Interviews/ meetings

Early meetings

Enquiry staff should be encouraged to make early contact with the agent and to offer an early meeting, which should be held after the initial review of the records. There may also be instances where it would be useful to meet and discuss the construction of the accounts before the examination of the records. Such meetings should lead to a better understanding of how the accounts have been prepared. In deciding whether such a meeting is appropriate the additional cost to the taxpayer should be considered. This meeting, will not, in the majority of cases replace a meeting with the taxpayer, which should take place as soon as practicable after the examination of the records.

Agenda

Enquiry staff should provide an agenda covering the main areas for discussion. This should enable the agent to carry out any necessary preparation or research in advance of the meeting. It should be case specific but not a detailed list of questions and should not be seen by either party to be exhaustive or restrictive. We would not expect a completely new major agenda item to be introduced at the meeting unless something unexpected is revealed during the course of the meeting.

Content

Again, enquiry staff whilst being encouraged to use a standard approach should adapt that approach to the circumstances of the taxpayer, particularly when considering questions relating to personal expenditure. Questions involving a spouse's income/expenditure may be asked with prior agreement or where the taxpayer introduces information relating to a spouse's contribution to the household.

Place and time

Enquiry staff should be encouraged to offer a flexible approach to the time and place of any meeting subject to health and safety/personal security issues. Meetings at business premises should be the norm rather than the exception, this would assist in making the meeting less intimidating for the taxpayer and provide opportunities to see the business first-hand. Where small businesses are operated from home it is accepted that this might not be appropriate and enquiry staff should be flexible where the taxpayer would prefer the meeting to be held on Inland Revenue premises.

Access to non business bank details (including credit / charge/store cards)

The consultation process with OCC has helped us to look again at the guidance written at the time SA was introduced. We recognise that it can be clarified and that it should also be made public so that the professions, taxpayers and our staff have a clear and consistent view of our stated practice.

It will not be appropriate to request private bank details in every case nor as a matter of process. However, where accounts are not based on a robust and effectively operated record keeping system which is supported by adequate and appropriate safeguards and/or include unvouched or unverified sums, it would be reasonable to request the private bank details with the other records. The position could be established through telephone contact with the agent or by making the basis of the request clear in the opening letter. It is considered reasonable to request such details at an early stage to ensure that the enquiry is brought to as speedy a conclusion as possible.

Where any limitations are concerned solely with unvouched or unverified items of a minor nature e.g. use of home as an office or weekly laundry, then it would not be appropriate to seek access to the non business bank details.

In addition, we would welcome provision of the private bank details with the records where agents consider that it would be helpful in order to highlight any particular issues or to expedite conclusion of the enquiry.

The current guidance (EH399) which sets out the reasons where it would be appropriate to request private bank details will be revised and made public.

General

OCC will encourage their members to work with enquiry staff to provide timely and complete responses where the enquiry is worked within the proposed framework.

Management

We will address improvement of management of investigation cases through training and revised guidance.

Guidance

Our guidance will be amended and clarified to cover aspects of this framework and supported where necessary by additional training.

We expect to start operating within this framework in March 2002 though it will take some time to deliver additional training and before our enquiry staff are fully familiar with this new approach to ITSA enquiry work.

As a result of this review a number of issues have been raised as to the appropriateness of the framework document in relation to enquiries into Corporation Tax Returns. We are currently looking at how these outcomes can be translated and whether there are any legislative issues that would require a different approach.

ENQUIRY HANDBOOK - REQUEST FOR PRIVATE DOCUMENTS

CURRENT GUIDANCE

EH 399

Extent of enquiries: Possible relevant factors

If the taxpayer or agent disagrees that the documents are relevant or that it is reasonable for you to see them, you should consider the arguments carefully. If you do not accept them the taxpayer will be able to appeal against the Section 19A Notice to the Commissioners. We do not know what the Commissioners will judge to be reasonable for the purposes of Section 19A. They may be influenced by all or any of such factors as

  • whether the return was, in full or in part, based on the private bank account documents
  • the likelihood that the bank account contains information relevant for the purpose of checking the taxpayer's liability (the Commissioners will be able to consider what the taxpayer says the account is used for)
  • the existence of links between the account and sources shown in the return (for example was it used for business transactions or were business drawings banked there?)
  • whether the account is interest bearing (and the amount of the interest and whether it was declared)
  • the scope for error or omissions in the type of income, etc. in the return under enquiry
  • whether other records relating to the entries in the return are available
  • if so, how reliable, comprehensive or conclusive they appear to be
  • whether the income, etc. under enquiry is such as can be verified by other means (such as third party information)
  • the opportunities available to the taxpayer to have taxable receipts (or deductions) that might not be reflected, or fully reflected, in the records on which the return is based
  • doubts or questions about the accuracy/adequacy/probability of particular figures in the return.

ENQUIRY HANDBOOK - REQUEST FOR PRIVATE DOCUMENTS

REVISED GUIDANCE

EH399 EXTENT OF ENQUIRIES: WHAT IS REASONABLE?

The over-riding test (EH398) is based on what is reasonable (that is, fair and sensible) in the circumstances. The question of whether it is reasonable to request private documents including bank and building society accounts (EH 398) can only be determined by reference to the facts in each individual case.

Non business bank details should not be requested in the opening letter as a matter of course. However, where accounts are not based on a robust and effectively operated record keeping system which is supported by adequate and appropriate safeguards and/or include unvouched or unverified sums, it would be reasonable to request the private bank details with the other records. The position could be established through telephone contact with the agent or by making the basis of the request clear in the opening letter.

Where the limitations are concerned solely with unvouched or unverified items of a minor nature e.g. use of home as an office or weekly laundry, then it would not be appropriate to seek access to the non business bank details.

  • In determining whether a request is reasonable you should consider factors including those listed below before making a request or issuing a Section 19A notice. You must have grounds for the request which would satisfy a Commissioner you should therefore consider any objections from the taxpayer or agent before the Section 19A notice is issued.
  • Where payments from an account to the business are treated as non-taxable e.g. capital introduced (where not independently verified).
  • Where it is reasonable to suppose that business records (or the equivalent for non-business transactions) are incomplete.
  • Where it is reasonable to suppose that undeclared income or gains have been credited to the account.
  • Where you have doubts or questions about means or capital growth
  • Where it is reasonable to suppose that the return was based, wholly or partly on the "private" bank account documents
  • Where taxable receipts or expenditure are unvouched or estimated and it is reasonable to expect that this expenditure could have been vouched/recorded.

When determining whether you require non-business information you should consider the taxpayer's costs (in time and money), and pursue the matter only where you are satisfied that the potential benefit to the enquiry is proportionate to these costs. This is particularly relevant in seeking duplicate statements for non-business bank accounts.

NB Correctly and contemporaneously recorded business drawings being deposited in a non business account is not sufficient reason alone to request the details of that account.

New ITSA Enquiry Opening Letters

Individual's return

Aspect enquiry

Thank you for your Tax Return for the year ended 5 April [ ].

I am writing to tell you that I intend enquiring into this return.

My enquiry is into [e.g. "your capital allowances" and/or "your property sale"]. I will not be asking about other areas of your return unless your reply, or any further information I see, contains something that I need to check

I enclose a copy of "Enquiries into Tax Returns by local Tax Offices" and a Question and Answer leaflet. These explain how we make enquiries and how we keep our promise of fair treatment under the Revenue's Service Commitment to You. The Question and Answer leaflet addresses practical issues that may concern you. Please take some time to read them both.

Please let me have the information on the attached schedule within [minimum of 30] days of when you receive this letter. Let me know at once if you cannot do this.

I am also sending a copy of this letter and schedule to your tax adviser, [name of agent]. You should talk to them about this letter.

You can ring me on the number at the top of this letter if you want to discuss anything about my enquiry into your return.

Individual's return

Full enquiry

Thank you for your Tax Return for the year ended 5 April [ ].

I am writing to tell you that I intend enquiring into this return.

[My enquiry will cover the whole of your return.]OR[My enquiry will cover all of your [e.g. "self-employed business"] [and I will also be looking at [e.g. "your capital allowances" or "your bank and Building Society interest"].]

I enclose a copy of our Code of Practice, "Enquiries into Tax Returns by Local Offices". Please take some time to read it. The Code explains how we make enquiries and how we keep our promise of fair treatment under the Revenue's Service Commitment to You. Our Service Commitment is set out on the inside back cover of the Code of Practice.

Please let me have the information on the attached schedule within [a minimum of 30] days of when you receive this letter. Let me know at once if you cannot do this. [I can come to your premises to view your business papers, if you would prefer it.]

I am also sending a copy of this letter and schedule to your tax adviser, [name of agent]. You should talk to them about this letter.

You can ring me on the number at the top of this letter if you want to discuss anything about my enquiry into your return.

Inland Revenue Enquiries

Your Questions Answered

This leaflet answers questions we are often asked about enquiries into Returns and claims.

Please also read "Enquiries into Tax Returns by Local Tax Offices" that I sent you.

Why are you enquiring into my Tax Return?It is your responsibility to ensure that the entries on your Tax Return are correct. It is our responsibility to check them to make sure you are paying the right amount of tax. Each year we select some Returns and claims for an enquiry.

Why don't you just phone and ask me?The normal way to request further information from you in respect of entries on your Return is to open a formal enquiry. The notice of an enquiry must be in writing to you. We may also open an enquiry to check any amendments you have made to your Return, or any claim you have made.

Why are you asking for information that your office may already have?You are responsible for making a self-assessment. So you have to complete all the entries on a Return that apply to you, even if you think that we may have received the information from someone else, such as your employer. As part of our enquiry, we may need to ask for more information so that we can check the figures you put on the Return.

Why have you taken so long to ask me these questions?A lot of Returns come to us around the same time of year. We plan our work to cover the entire year, which means that some enquiries will not be made until some months after the Return is submitted. We are allowed up to12 months after the "filing date" to open an enquiry. The filing date is normally 31 January. That means, for a 2001/2002 Tax Return, received by 31 January 2003, we have until 31 January 2004 to begin our enquiries.

What if I can't remember what I put on the Tax Return?We can give you a photocopy of your Tax Return, just ask for one.

What if I have paid too much tax?In the majority of cases a repayment based on the entries on your Return will automatically be made when the Return has been processed.

What if I can't find some of the information you are asking for?Send what you have, within the time we gave you when we asked for it. Tell us why you don't have the rest of the information and what you are doing about this. Don't ignore any request we send you. If we don't hear from you we will make a formal request for the information. We can charge you penalties if you ignore a formal request.

What happens when you receive the information?We check that you have sent us everything and then compare it with what you put on your Return. If we need you to clarify something or to give us more information, we will write and ask you.

What happens if I want to change anything on my Return or claim?You should tell us as soon as possible. We will consider what you say and make any changes we have agreed with you at the end of the enquiry.

What happens at the end of your enquiry?We issue a formal "closure notice ". The closure notice will give our conclusions. In our conclusions we will explain any changes that we feel are needed to your Return or claim, or we will say that no change is needed.

If we think changes are needed, the closure notice will make those changes to your Return or claim and it will include a revised calculation. We hope that what we have told you during the enquiry will help you to complete your next Tax Return correctly.

What if I do not agree with the figures or what you have said in the closure notice?You can appeal against our conclusions or any amendment that we have made, using the appeal form that comes with the closure notice or by writing to us within 30 days. If you want to know more about the appeal procedure, please ask for leaflet IR37.

What if there is more tax to pay?Unless you appeal within 30 days and ask for some, or all, of the tax to be postponed, this tax will be due in full by the filing date (normally 31 January when your Return was due), or within the next 30 days, whichever is later.

Will I have to pay interest on the additional tax?Interest is automatically charged on tax that is paid late. It is late if it is paid after the filing date (normally 31 January when your Return was due). If you pay any extra tax within 30 days of receiving the enquiry closure notice, interest will still be charged if this is after the filing date.

When is the whole process considered final?When either:

1) 30 days have passed since the issue of the closure notice and you have not made an appeal,

or

2) your appeal has been settled by negotiation between us or at an appeal hearing.

What if I can't pay all the tax at once?We may be able to accept instalment payments but this will depend on your personal circumstances. Let us know if you need more time to pay.

And if I don't understand what is going on?If there is anything that you don't fully understand during the enquiry, please telephone the person who wrote to you. Their direct line number is at the head of the letter. If they are not available someone else in the office will help you.

If you feel that a meeting would help, we will try to arrange one at a time to suit you.

Provisional Figures in Returns

We have changed our guidance to staff on how to handle ITSA Returns containing provisional figures or CTSA Returns containing estimated figures. For more information please see Tax Bulletin Issue 57 at www.inlandrevenue.gov.uk/bulletins/index.htm

Copy Coding Notices to Agents

In issue 5 (June 2001) we told you that we will start to send you copies of PAYE Coding Notices (P2) from this April.

Self Assessment Taxpayers

These will be sent out automatically using the details held on your clients' Self Assessment computer records (please let the Tax Office know if, for any reason, you do not want to receive these).

Non Self Assessment Taxpayers

So that you can start to receive copy P2s for these clients, from mid April contact your client's Tax Office by letter, telephone or fax and request that copy P2s are sent to you. The Tax Office will update your client's computer record.

Class 2 National Insurance Contributions - How to Notify Liability to Pay

Issue 5 of Working Together outlined the penalty provision introduced from January 2001 that applies where a self-employed person does not notify their liability within 3 months from the end of the month in which their liability starts. Issue 7 of Working Together drew attention to an article about these changes in the August 2001 edition of Tax Bulletin. The purpose of this article is to give more information about how people can notify the Inland Revenue of their Class 2 liability. It does not deal with the further arrangements concerning self-employed sub-contractors covered by the Construction Industry Scheme (CIS). Advice for people covered by the CIS is set out in the Guide Help for your Business in the Construction Industry. The Guide is published by HM Customs and Excise and is available from Inland Revenue Offices and the Revenue website at www.inlandrevenue.gov.uk/leaflets. The CIS featured area of the Revenue website also provides additional guidance for people covered by the scheme.

The package of measures launched in January 2001 under the Starting up in Business initiative also introduced a more streamlined registration process. The aim of this new process is to make it simpler for newly self-employed people to notify the Revenue of their Class 2 NIC liability and to ensure that by notifying Class 2 liability they are also registered for Self Assessment Income Tax. There are two ways to register. People can either:

  • Ring the dedicated Helpline for the Newly Self-employed or
  • Complete the notification form CWF1 and send it to the National Insurance Contributions Office (NICO) in Newcastle.

Helpline for the Newly Self-employed

The Helpline was set up to provide advice and support to people considering or starting self-employment. As well as enabling people to register without having to complete the usual forms. The Helpline

  • can provide callers with advice on tax and NICs and arrange a visit from the Revenue's Business Support Teams.
  • offers a diary callback service where the self-employed person can be called after a few months in case there are any matters that have arisen in the early days of their new business that they want to discuss. This service is offered and diary calls arranged when the person has been registered through the Helpline.

The Helpline is open from 8.00am to 8.00pm seven days a week. But the number of calls made in the early part of each weekday, particularly on a Monday, is far in excess of that which the Helpline can handle. Please help us by avoiding peak times.

The telephone number for the Helpline for the Newly Self-employed is 08459 15 45 15.

Completion of notification form

People can still register by completing a notification form. An element of the new registration process was the introduction of a much simpler version of form CWF1. The new form seeks only the information required from all newly self-employed business people and tries to avoid asking for information that the Inland Revenue already holds. If further information is needed to register a person for SA, for example about partnerships, Tax Office staff will seek it separately. The form is available in leaflet P/SE/1 - Thinking of Working for Yourself? and can be obtained from Inland Revenue Enquiry Centres, Tax and National Insurance Offices, or downloaded from the Inland Revenue website at www.inlandrevenue.gov.uk/startingup

Authority to notify a client's liability

The Helpline cannot register people as self-employed when the call is made by an agent unless a form 64-8 has already been received by NICO. Remember that you must now use the new style form 64-8; this will authorise you to act on behalf of your newly self-employed client on NICs matters as well as tax (we gave you further background on this in Working Together issues 1 & 2) www.inlandrevenue.gov.uk/workingtogether/publications/index.htm

You may therefore prefer to send the completed CWF1 together with the 64-8 direct to NICO at the address below.

Once NICO receive the 64-8 they will record the details on to their database and send a copy of the 64-8 to the Tax Office (and the Tax Credit Office if appropriate). The Tax Office will enter the agent's details on to the Self Assessment computer system.

The new style 64-8 can be obtained from Inland Revenue Offices and the website at www.inlandrevenue.gov.uk/menus/formmenu.htm

Completed forms should be sent to:

    Inland Revenue National Insurance Contributions Office Benton Park View Newcastle upon Tyne NE98 1ZZ

The Self Assessment Business Calendar

The planned dates for the next issue of Self Assessment communications are as follows:

Issue dates Documents

28 Feb to 11 March 02 Statements (selected from 27 Feb onwards)

25 March 02 Surcharge notices

Please note that for operational reasons these dates may be subject to change

First Fixed Rate Penalty Notices

Income Tax Returns issued at the normal time have to be submitted to the Inland Revenue on or before 31st January following the year of assessment. So returns for 2000/2001 received by the Inland Revenue on Friday 1st February 2002 were late. However, a first fixed rate penalty should only be charged where it was clear that the Return was delivered after 1st February. The computerised selection of cases where such a penalty is chargeable took place on Friday 22 February and penalty notices were issued on Wednesday 27 February. (These dates may be subject to change after this article went to print.)

In the last couple of years some penalty notices have been incorrectly issued in cases where Returns have not been late. We have investigated the reasons for this and consequently made some changes to our internal procedures. It is unlikely that we will be able to eliminate the problem entirely, but we are committed to substantially reducing the number of incorrect notices issued this year.

If you receive a first fixed rate penalty notice for failing to file a 2000/2001 Return on time that you consider to be incorrect you should contact the relevant Tax Office. In addition, however, we would find it extremely helpful to have some specific feedback. So please would you send details of the case by email to the Working Together Team. Contact details are given below.

Please note that where a Return received after 1st February shows: -

  • a nil liability to pay,
  • a repayment is due, or
  • an amount paid by 31 January that is equal to the liability,

no fixed rate penalty is chargeable. But these circumstances will only be known when the Return has been fully processed - which may take a little while from the date of receipt - and we do not consider the issue of the penalty notice to be incorrect. So these cases should not be included in any feedback. Again, however, you should contact the relevant Tax Office if you consider a penalty is not chargeable. All penalties remain due and payable until we have received a Return to prove that the penalty should be cancelled.

Returns to Non-Resident Individual Landlords

The Inland Revenue Centre for Non Residents (CNR) is presently reviewing Non-Resident Individual Landlords (NRIL) who have no net liability to income tax with the intention of not issuing future Returns to these individuals.

Tax Calculation - New Wording

Where a Return is filed after 30th September, there is often confusion over whether or not a Statement of Account will be issued before the January due date. Some taxpayers claim to have missed the due date for payment because they did not receive a Statement.

From April 2002

The Tax Calculation (SA302) will include one of the following messages:

  • Where the SA302 is issued prior to 5/12/2002 it will contain the message:"You should receive a Statement of Account nearer the due date telling you how much to pay."
  • Where the SA302 is issued after 5/12/2002 the message will change to:"It is now unlikely that I will be able to send you a Statement of Account telling you how much to pay by 31st January. The above information will help you to decide how much to pay by then."
  • And for those issued after 31/1/2003 the message will be:"A due date has already passed. The above information will help you to decide how much you should pay now. Do not wait for the next Statement of Account."
  • In addition to this, a new leaflet is being introduced called `How To Pay Your Tax'. This leaflet will be issued with all Tax Calculations and Statements.

Tax Treatment of Deferred Revenue Expenditure

Tax Bulletin 53 (June 2001) published an article entitled "Interaction of tax and accountancy: `deferred revenue expenditure'". See www.inlandrevenue.gov.uk/bulletins/index.htm. The article clarified and re-affirmed an earlier article published in Tax Bulletin 39 (February 1999).

`Deferred revenue expenditure' is allowable revenue expenditure, which has been posted to fixed or current assets in the balance sheet instead of writing it off immediately to the profit and loss account as it is incurred. It is usually written off to the profit and loss account over a period of time. Court decisions about the interaction of tax and accountancy have established that there is no rule of law stating that expenditure is tax deductible as it is paid or incurred. For timing purposes, the starting point for tax is the measure of accounting profits drawn up under generally accepted accounting practice. This means that expenditure which is revenue in terms of tax law, but which is deferred (or "capitalised") and shown in the balance sheet, can only be relieved for tax purposes when posted to the profit and loss account in accordance with generally accepted accountancy practice.

Any computational adjustment to obtain relief on a paid or incurred basis for this kind of expenditure is no longer acceptable. This treatment, of course, only applies to genuine revenue expenditure because capital expenditure is not allowable as a deduction. We expect the correct view of the law to be applied for any Income Tax or Corporation Tax Return where it includes profits or losses shown in accounts for periods starting after 30 June 1999. By this date it is reasonable to assume that details of the new approach to the tax treatment of deferred revenue expenditure would have become known, following the publication of the article in Tax Bulletin 39.

For further details of the treatment of deferred revenue expenditure please refer to Tax Bulletin 53.

Substitute Tax Returns & Changes of Address

Substitute Tax Returns may be used in place of the official printed forms under the terms of Inland Revenue Statement of Practice SP5/87. Guidelines are provided to assist computer software suppliers and others who need to get approval for their substitute forms.

Question 21 on the Tax Return asks " Are your name or address on the front of the Tax Return wrong?"

If the answer is `Yes' then corrections should be made on the front of the form so that the taxpayer's record can be updated to ensure we send correspondence to the right address.

Sometimes, the use of substitute Tax Returns can cause confusion as the name and address on the front of the substitute form is an automatic update using the latest address. In these cases, although we may not have the latest address on our records, Question 21 would of course be answered `No'. So, if it is a fairly recent change of address then it is always better to draw it to our attention so we can check the record.

If a new address is shown on a substitute Tax Return it would be helpful if this could be brought to our attention by printing the words `NEW ADDRESS' alongside the address box. Alternatively, the new address can be entered in the `Additional Information' box.

How to Pay Electronically - Update

Since our article, `Payment of Self Assessment Liability' in Working Together issue 7, Girobank BillPay now accepts Solo and Electron cards in addition to Switch and Visa Delta. Please see our website at www.inlandrevenue.gov.uk/ebu/billpay.htm

The Future of SAT 2

SAT 2, "Self Assessment: the Legal Framework" was issued free to tax practitioners in 1995.

In response to queries from agents about the future of this publication, we explained in issue 4 that we had no immediate plans to update and maintain SAT 2, but went on to say that we would keep the situation under review and consider the position after the Finance Act.

We have now decided to go ahead with a programme later this year, to update SAT 2. The updated SAT 2 will only be available on the Internet.

You might want to take this opportunity to suggest any areas where you need additional or improved guidance. Contact the Working Together Team with any comments; contact details are given below.

R40 Repayment Claims

The Revenue's policy on R40 repayment claims is such that an R40 form should only be completed when a repayment arises from taxed investment income and not from PAYE tax. An R40 claim is appropriate where

  • the taxpayer has taxed investment income and
  • there is a balance of reliefs or tax credits after Schedule E and any untaxed income have been taken account of and
  • there is the likelihood of an annual repayment as a result.

Where individuals have taxed investment income that is wholly or partly covered by their allowances, there is no need to send vouchers, including P60s, with the R40 repayment claim.

Please note that when we receive an R40 to claim repayment of PAYE tax, but the case is not appropriate for an R40 and the Employer's End of Year Return is not available, we will not make a repayment of PAYE tax without the original P60.

Self Assessment Tax Return Guides

Copies of the

  • SA1000 Self Assessment Tax Return Guide for individuals
  • SA1001 Self assessment Partnership Tax Return Guide
  • SA1002 Self Assessment Trust and Estate Tax Return Guide,

incorporating related forms, notes and help sheets are produced and issued on an annual basis as a service to tax practitioners and Inland Revenue staff.

For 2001/2002 we'll be using the agent details held on the Self Assessment system for bulk mailing purposes. We'll send at least one copy of each of these Guides to any agent with more than five clients on the Self Assessment database.

If you had to order extra copies last time, our database will track down any supplementary orders and the initial supplies received in March 2002 should match the quantity you ordered, in total, last year.

We are continuing with the ordering and mail-out arrangements, which we provided in March 2001. So if you need extra copies after your initial supplies have been delivered, you can order them by:

e-mailing (saorderline.ir@gtnet.gov.uk), orfaxing your order to the SA Orderline on 0845 9000 604, ortelephoning the SA Orderline on 0845 9000 404, orcompleting the tear-off re-order card that will come with your supply of the guides, and sending it to:

    SA Orderline PO Box 37 St Austell PL25 5YN

Any additional orders must clearly state how many copies of each of the three guides (Individual, Partnership, or Trust) are required and where they are to be sent.

New for 2002 - You will be asked to supply your Agent Code (which can be located on the Clients' Account Information notice which is sent to you twice a year in December and June), when requesting additional copies of the guide. This is to ensure that your records are correctly updated so that for the following year you will receive a supply equal to what you have ordered in total for this year.

Please note: the SA Orderline will not be able to process any orders for Return Guides until after 6 April 2002.

Please allow sufficient time for your initial order to be received before contacting the Orderline.

We must stress that Tax Offices will not hold copies of the SA Guides for issue to agents. However, if you find that the name and address details shown on the distribution are incorrect, or if there is duplication, please contact your Tax Office and ask them to correct the details held on the Self Assessment computer system.

We do not intend to do another print run so please only order sufficient guides to meet your needs. After 6 April 2002 you'll be able to view the forms, notes and help sheets, and download them, from the Inland Revenue Self Assessment web page at www.inlandrevenue.gov.uk/sa

Editorial

Working Together is a joint initiative with the CIOT, ICAEW, ATT, ACCA, ICAS and AAT. Although the material in this publication obviously reflects discussion and consultation with these bodies, the Revenue is solely responsible for its contents and for the views expressed in it.

Contact details & back issues

Back issues can be downloaded from our featured area on the Revenue website www.inlandrevenue.gov.uk. If you would prefer a paper copy, please write to or e-mail the address below. Working Together is covered by Crown Copyright. There is no objection to firms copying the publication for their own use. Anyone wishing to re-publish Working Together or extracts more widely, should write for permission to

Greig Rattray Working Together Team 7N South West Wing Bush House London WC2B 4RD

or e-mail: Greig.Rattray@ir.gsi.gov.uk.

   
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