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HMRC internal manual

Debt Management and Banking Manual

Payment Allocation, Overpayments and Repayments: Self Assessment: Automatic Payment Allocation in Enforcement Cases

The SA system automatically allocates payment to liabilities in strict chronological order. See DMBM210160.

This may cause problems in some proceedings cases. For example, where proceedings are taken to recover the first payment on account and accrued interest but payment is made after the second payment on account becomes due. The actual interest charge is not created until after payment for the underlying debt has been made that is later than the second payment on account. SA would automatically allocate money to the (earlier) second payment on account before the interest charge on the first.

You should allocate payments as per the debts claimed in the proceedings. If you do not you may prejudice further proceedings.

To ensure the correct allocation, follow the procedures at DMBM210190and DMBM210195.