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HMRC internal manual

Debt Management and Banking Manual

Payment Allocation, Repayments and Overpayments: IRIS: Automatic Reallocations on the D/E Masterfile

Automatic Reallocation Where an overpayment arises as a result of an amendment to a Schedule D tax and/or Class 4 NIC charge, the overpayment will normally be

  • automatically reallocated against any other tax or NIC outstanding in respect of the amended assessment (see DMBM210275). Where a balance of tax or NIC remains outstanding, we automatically

  • advise the taxpayer of the reallocation, where the amount being reallocated is more than £10
  • request payment of the outstanding amount using the normal Demand cycle.

Automatic Reallocation not appropriateThe overpayment will not be automatically reallocated if the amendment is processed before 1 June following the end of the year of assessment and either

  • an amount of £1,000 or more is to be reallocated to the second instalment


  • the tax etc is not yet due and the taxpayer has asked that no reallocation should be made. DMB Banking will

  • be notified of the overpayment on the Daily OAS Statement, and
  • deal with these cases clerically.

Note: Automatic reallocation of an overpayment is not used for Schedule E charges. Where appropriate, DMB Banking will send a report to the Processing Office.