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HMRC internal manual

Debt Management and Banking Manual

Payment allocation, overpayments and repayments: setting off repayments against debts across all duties

S130 FA2008 and S178 FA2016 give HMRC the power to set-off amounts that are due to be repaid to a person against debts owed to HMRC by that person, including contract settlements. The power to set-off applies in England, Wales, Northern Ireland and Scotland. It enables HMRC to operate UK-wide across the whole range of debts administered by them with the exception of Tax Credit payments, Child Benefit payments, and Guardians Allowance.

The power is limited in insolvency by S131 FA2008, which prevents repayments for periods after a person’s insolvency being used to satisfy debts from before their insolvency (unless the repayment also related to the earlier period).

For further information see DMBM700000.