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HMRC internal manual

Bona Vacantia Guidance

Bona Vacantia: Treatment of payments

Allocating overpayments

If a company has been dissolved, any unallocated payment or overpayment must be released as bona vacantia but only after set-off has been considered.

Once the payment has been transferred to the BV recipient it cannot be returned unless there has been a genuine error. In those cases if you encounter difficulties in obtaining return of the payment from the appropriate bona vacantia recipient, advice should be sought from the Central Policy Tax Administration Policy team - relevant contact details can be found on the Central Policy website.


An overpayment is not necessarily bona vacantia, because the company may owe HMRC money immediately before it was dissolved.

So, where you are aware that the company has a liability to HMRC under any Head of Duty, set-off should be considered before the payment is dealt with under bona vacantia. This is important because once the money is released as bona vacantia it cannot be later recovered from the BV recipient to set off against any company debts to HMRC, discovered after the release.

To the extent that you can match the overpayment with a liability to HMRC, you should apply set-off, that is to allocate it in settlement of that liability.

Releasing bona vacantia

To the extent that the overpayment cannot be set-off against liabilities to HMRC, it is bona vacantia and must be released to the relevant BV recipient. BVG1040 will help you find the right BV recipient.

The release to the relevant BV recipient constitutes a repayment for HMRC purposes so the normal legal consequences of that will apply.

Guidance specific to the procedure to be followed in order to make a payment to the BV recipient is provided by each affected Head of Duty.

Any payment made to a BV recipient should be accompanied by a remittance advice setting out all of the following information:

  1. The amount of bona vacantia being sent,
  2. The name of the company,
  3. The company registration number (CRN).

Payments received after a company has dissolved

Payments received after a company has dissolved are not bona vacantia as they are not an asset of the company immediately prior to dissolution.

Pursuit of a company debt should cease as soon as the company is dissolved. If you continue to pursue a debt after this date which results in payment, that payment should be returned to the person that paid it as soon as you become aware that the company has been dissolved.

Any payments voluntarily made by an ex-official after the company is dissolved (i.e. no action was taken to recover the debt after the company was dissolved) should be used in satisfaction of any company debt arising for a period before the date of dissolution. If no such debt exists, or there is an excess of funds, then steps should be taken to send the overpayment back to the sender. Any sums that cannot be returned should be allocated to Permanent Overpayments