DMBM210110 - Payment allocation, overpayments and repayments: payment allocation: order in which debts should be satisfied
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If a customer makes a payment without a correct and complete reference number, but there is an implied direction (for example, there is an outstanding liability that matches the payment amount), allocate the payment to that liability.
If a customer makes a payment without a correct and complete reference number and there is no implied direction, allocate the payment in the customer's best interests. Normally, you should use the following order:
1. Liabilities already subject to enforcement action, including:
• Distraint already levied
• Summary Proceedings (SP) order made
• County Court Judgment (CCJ) entered
• Statutory demand or bankruptcy petition pending
• Winding up petition served in England, Wales or Northern Ireland
• Ordinary Cause or Summary Warrant in Scotland
• Enforceable fees and costs before duty
2. Class 2 NICs
3. Interest-bearing liabilities
4. Non-interest-bearing liabilities (excluding Class 2 NICs), including enforcement fees and costs that have not yet been awarded.
If the customer has no outstanding liabilities, retain the payment on the account that is most likely to have the earliest future liability.
If the customer is unlikely to have future liabilities, repay the payment where possible.
If HMRC has already appropriated the payment and the customer wants it allocated differently, they should contact us.