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SAM121621 | Returns: individuals returns: tax equalised employees (Action Guide)

From HM Revenue & Customs · Self Assessment Manual

Note: Any employee dealt with within a Modified PAYE scheme should always be dealt with by the Manchester EXPAT team.

Where you identify a case where Appendix 6 applies follow steps 1 - 14 below.

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

This guide is presented as follows

Payments on account to be set to zero for the year following the return year and a return for that year is not recorded as issued (the annual selection process has not yet taken place), and the case is identified before capture of the return

1. Use function AMEND TAXPAYER SIGNALS to

  • Set the SA Entry / Exit Letter Inhibited signal to ‘Y’

  • Enter the year of the return in the Last SA Return Required for Year Ending 5 April field. For example, if payments on account are not due for 2014-15 following capture of the 2013-14 return, enter ‘14’

2. Complete capture of the SA return

3. On the following day use function VIEW STATEMENT to confirm that liability for the return year is shown, once the details are shown

4. Use function AMEND TAXPAYER SIGNALS to

  • Delete the entry in the Last SA Return for Year Ending 5 April field

  • Set the SA Entry / Exit Letter Inhibited signal to ‘N’

5. Select the SA Note (Tax equalised employees, check payments on account if return amended) from the SEES Notes Paster

Note: If an amendment is made to the return and payments on account are created but not required follow steps 6 - 9 or 10 - 14 as appropriate

Payments on account to be set to zero for the year following the return year and a return for that year is not recorded as issued (the annual selection process has not yet taken place), and the case is identified after the capture of the return

6. Use function AMEND TAXPAYER SIGNALS to

  • Set the SA Entry / Exit Letter Inhibited signal to ‘Y’

  • Enter the year of the return in the Last SA Return Required for Year Ending 5 April field. For example if payments on account are not due for 2014-15 following capture of the 201314 return, enter ‘14’

7. Access function CREATE RETURN CHARGE for the return year and select ‘OK’. This will remove the payments on account

8. Use function AMEND TAXPAYER SIGNALS to

  • Delete the entry in the Last SA Return Required for Year Ending 5 April field

  • Set the SA Entry / Exit Letter Inhibited signal to ‘N’

9. Select the SA Note (Tax equalised employees, check payments on account if return amended) from the SEES Notes Paster

Note: If an amendment is made to the return and payments on account are created but not required, repeat the action above or steps 10 to 14 as appropriate

Payments on account to be set to zero for the year following the return year and a return for that year is recorded as issued (the annual selection process has taken place). This is only effective after capture of the return

10. Use function VIEW STATEMENT to check whether payments on account have been set up for the year following the return year

  • If they have not

  • Take no further action

  • Otherwise

  • Make a note of the payments on account and balancing payment charge for the year of the return, then

11. Access function CREATE RETURN CHARGE for the year of the return and

Add together the amounts in the following fields

  • Income tax due after reliefs

  • Recoverable tax on charges

  • Class 4 National Insurance

  • Unpaid tax for earlier years in PAYE

  • Underpayments for earlier years, and

  • Tax already refunded

Deduct from this total the amounts in the following fields

  • Tax deducted at source

  • Tax due included in later PAYE code

  • Overpayments for earlier years, and

  • Later year tax reclaimed now

12. Enter the resulting total in the Underpayments for earlier years field and 0 (zero) in all the other amount fields except for the ‘Student Loan and/or Postgraduate Loan Repayment’ field and the ‘Capital Gains Tax’ field, which should remain unchanged (but including the fields for CODA Partnership Tax and NIC due) then select the [OK] button

13. Use function VIEW STATEMENT to check that all of the liability for the year of the SA return is now shown as a balancing payment charge and that no payments on account are shown as due for the year of the SA return or for the year following the return year

14. Select the SA Note (Tax equalised employees, check payments on account if return amended) from the SEES Notes Paster

Note: If an amendment is made to the return and payments on account are created but not required, repeat the action above