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HMRC internal manual

COTAX Manual

HM Revenue & Customs
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Payments: payments returned by the bank: introduction

Once a payment has been processed and allocated to the company’s COTAX record, HMRC does not receive credit for the amount claimed where the payment is returned by the bank. At DMBM207100 the Debt Management Banking Manual gives more information on the following types of returned payments:

  • returned cheques
  • removing the credit from the taxpayers record
  • retention of unpaid cheques
  • ‘recall’ of electronic payments
  • failed direct debit payments.

DMBM207110 specifically details how returned payments are dealt with by DMB when they affect a COTAX record.

Lodgment Adjustment

Where the bank advises Banking Operations that the amount claimed in the bank lodgment was incorrect, the monetary adjustment is known as a ‘Lodgment adjustment’. Lodgment adjustments differ from returned cheques in that you have obtained credit for the original payment but for the wrong amount. Banking Operations follows the guidance at DMBM234510 to deal with lodgment adjustments.