CH 8 - Introduction to SA

Question 1

When individual needs to notify HMRC of changeability

Answer 1

within 6 months of the ned of the tax year in which they become charg.

individual got duty to notify HMRC

e.g. for tax year 2023/24 deadline to nofity is 5 October 2024

Question 2

How are penalities for missing deadline to notify HMRC of chargebility calculated?

Answer 2

Penalty is a percentage of the ‘potential lost revenue’
(being Income tax incl. Class 4 & NI contributions and/or CGT unpaid at 31/01 following the tax year)

Question 3

What is the maximum penaltyfor failure to notify
(min./max. penalty) for un-/promted disculosure for;
* Deliberate & concealed
* Deliberate & not concealed
* Any other case

Answer 3

FA 2008, Sch 41)

Question 4

By when penaltis for ‘failure-to-notify’ must be paid?

Answer 4

Must be paid within 30 days of the date the notice assessing the penalty is issued
(otherwise interst will be charged)

Question 5

What is filling deadline for paper SA return?

Answer 5

later of:
* 31 October following the tax year
* 3mts after notice to file file was issued
(2mts if HMRC calculate tax)

Question 6

What is the filling deadline for online SA return?

Answer 6

Later of:
* 31 January following tax year
* 3mts after notice to file was issued

Taxpayers with simple tax affairs can fill in a short tax return which has no self-assessment.

Question 7

When tax return must be filed by the earlier deadline of
30 December following the end of the tax year?

Answer 7

Where tax deducted at source via PAYE is underpayment of less than £3,000
this can be collected via PAYE rather than a one-off payment if filed by 30 December

Question 8

Who can file ‘short tax return’ of 4 pages

Answer 8

• employees (not directors) with taxable benefits
• self-employed traders with turnover < £85k
• people with UK property income < £85
• pensioners who have pension & straightforward inv.income

Question 9

What are penalties for late filling of Tax Return?

Answer 9

• INITIAL £100
• > 3 MTS LATE £10 daily, up to 90 days
• > 6 MTS LATE 5% of liability to tax, up to £300
• > 12 MTS LATE additional 5% of liab to tax, upt o £300

Increased penalties apply if the withholding of information after more than 12 months is deliberate or deliberate and concealed.

Question 10

What are the time frames for amending submitted return?

Answer 10

HMRC - within 9mts of receiving return
TAXPAYER - within 12mts of normal filling date

Question 11

How HMRC enquires into SA
(dates & what is issued)

Answer 11

HMRC issues ‘ENQUIRY NOTICE’
within;
* 12mts of actual submission date
* or if late return, end of calendar quarter following the aniversay of actual fillind date

(Calendar quarters are 30 Apri, 31 July, 31 October & 31 January)

Question 12

How long should records be kept?
by
* sole trader, partner, letting property
* Anyone else?

& what is maximum penalty

Answer 12

SOLE TRADES - 5 years from 31.1 following tax year (5y 10mts)
ANYONE ELSE - 1 year from 31.1 following tax year (1y 10mts)

MAX Penalty - £3,000 for each failure

Question 13

By when Notice of appeal must be given?

Answer 13

(1st instance) to HMRC within 30 days in writing of the amendement or assessment etc as appropriate.

The notice should give the grounds for the appeal.

Question 14

Describe Appeal Process;

Answer 14

1. in writing within 30 days fo amendment or assessment
2. first instance appeal is to HMRC
3. if appeal can’t be settled by agreement, HMRC may offer review
4. if review not offered, taxpayer can either;
   
   • ask HMRC to review their decision
   • or ask the Tribunal to consider appeal (default paper, basic, standard or complex)

Question 15

What is tribunal

Answer 15

The Tribunal
is an independent legal body which consists of independently appointed expert tax judges and/or panel members.

Question 16

What is ADR?
& how ti can be made?

Answer 16

ADR is alternative dispute resolution (‘middle-way) & CAN BE MADE ONLINE (HMRC will decide within 30 days)

(offers a way of bringing a tax dispute to an acceptable conclusion without the need to involve the courts)

Question 17

What ADR can’t be used to resolve

Answer 17

• payment issues
• automatic late payment or late filing penalties
• tax credits
• PAYE codes
• HMRC delays in using information

Question 18

What are advantages of ADR?

Answer 18

1. parties retain control of outcome (nobody have to accept any outcome & is free to revert to litigation)
2. professional fees are considerably lower
3. the process of ADR is quicker than litigation would be
4. if ADR doesn’t lead to a full resolution of dispute, it will often reduce number of issues left for Tribunal to consider
5. ADR agreements are not published, unlike Tribunal decisions (maintain privacy and anonymity)

Question 19

What are penalties for
INCORRECT RETURNS

Answer 19

Question 20

WHO needs to register partnership?

Answer 20

A partnership must be registered with HMRC by the nominated partner .

Question 21

What is deadline to file Partnership (PS) tax return?

Answer 21

A partnership tax return must be completed and filed within the normal deadlines.

The individual partners must also file their own tax returns.

Any amendments & enquiries apply in the same way, and will result in corresponding amendments to the partners’ own returns
(enquiry to PS return will extend to partners own return)

Question 22

What is simple assessment ?
* who issues it
* what it includes
* deadlines?
* what are rights for individual

Answer 22

• HMRC can make an assessment of an individual’s tax liability without the individual having to file a tax return.
• The assessment will show the amount payable.
• The individual can ‘query’ an assessment within 60 days.
• The individual can appeal against an assessment once HMRC have given a ‘final response’ to a query.