Not registered for SA, Negative earnings, New ATED rates

There are always people who turn to you in January when they suddenly realise they need to submit a tax return for the first time. We have tips below on how to cope with those new clients. We also look at HMRC’s new guidance on negative earnings for employees, and the new ATED rates which are due to apply from 1 April 2017.

What follows is just an extract from last week’s tax tips for accountants – see more details in the side box and sign up to get your 3 timely, topical and commercial tax tips.

Not registered for SA

Every January one or two come knocking on your door (or land in your inbox) asking for help with their tax return. If the taxpayer has been issued with a tax return (or notice to submit one) and has a UTR number, you should be able to help him submit the return online.

However, where the taxpayer hasn’t registered with HMRC and doesn’t have a UTR number, his tax return can’t be filed online. It is now too late to apply for a UTR number to activate it by 31 January.

The errant taxpayer should have notified HMRC by 5 October 2016 that he needed to submit a tax return for 2015/16. HMRC can issue a penalty for late notification, but that penalty is tax-geared. If the taxpayer pays all the tax due for 2015/16 by 31 January 2017, no penalty is due. Also, if all the tax is paid within 12 months of the due date, any late notification penalty should be reduced to nil, if a full disclosure has been made without prompting from HMRC.

The problem is; how pay this tax and make the full disclosure if the online route is blocked. You can submit a paper tax return. Where the taxpayer hasn’t been issued with an SA return or notice to submit a return, a late filing penalty can’t apply.

The tax return submitted must include the taxpayer’s NI number, and be accompanied by a form SA1 to register for self-assessment. If the taxpayer has started a new self-employment, form CWF1 should be completed, but you can do this online, you don’t need the UTR number for that form.

The tax can’t be paid online without a UTR, but it can be paid by cheque posted to: HMRC, Direct, BX5 5BD. Write the taxpayer’s NI number on the back of the cheque and include a specific HMRC payslip, created using the link below. Allow at least three days for the cheque to arrive, and get a proof of posting certificate from the Post Office.

You may have to chase HMRC by phone to get the tax allocated to the right account, but that can wait until February.