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HMRC internal manual

Debt Management and Banking Manual

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HM Revenue & Customs
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Debt and return pursuit: PAYE RTI: payments: reallocating payments

Reallocations should be made in accordance with the HMRC Tax Accounting Appropriation policy.

The customer has the right to determine where their payment is allocated at the time of making payment. If they do, it should be allocated in accordance with the customer’s wishes, whatever the circumstances or the debt. The customer does not have to specify the precise allocation. It may be inferred from the circumstances. See DMBM210105 and the following pages.

Where a reallocation is made at the request of the customer which results in a charge becoming due, you must advise the customer and seek payment immediately (unless the charge is under an official dispute).

Always include an explanatory ETMP – RTI history note when reallocating.

Where you establish an employer’s payment has been allocated to the wrong liability, you can reallocate a payment to a different:

  • PAYE charge for the same employer
  • Contract Account on the employer’s Business Partner record.

Reallocations to other heads of duty still have to be made via OAS.

When reallocating from BROCS to OAS, the OAS reference number is immediately available. This means that the reallocation instruction can be sent to Banking on the same day the money enters OAS.

However, when moving a payment from ETMP to OAS, as the OAS reference number is not available until the next day, Debt Management staff should not attempt to reallocate a payment out of ETMP but do the following:

  • if the payment is already been allocated to a charge, using reset clearing to free the payment from the charge
  • lock the payment in ETMP using clearing lock code ‘0’ (see ETMP Helpcard 13a Set Locks and BF Payments (public folder)) and add an appropriate note on ETMP
  • send an eForm to Banking containing all the relevant reallocation details

This instruction for PAYE takes precedence over Finance Helpcard 18 ‘Reallocating out of ETMP.’

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Reallocating multiple payments

Only reallocate multiple payments/credits to a charge at the same time if they have the same EDP. If they have different EDPs then allocate them separately. This will allow the EDP to be shown on the View Customer Account screen.

Reallocating credits

There are some important aspects that should be taken into account when considering reallocating RTI credits within ETMP or to BROCS. A credit comes from an Employer Payment Summary (EPS), for example, for statutory payments, or Construction Industry Scheme (CIS) deductions suffered. It should not be confused with an actual payment of PAYE made by the employer. Please note the following.

  • Employment Allowance credit must never be moved from the tax year it was claimed for. It is an annual employment allowance to reduce the employers’ liability for Class 1 secondary NIC for that tax year only.
  • EPS credits should not be moved from the current tax year unless the employer has ceased and PT Ops have confirmed the credits can be set off elsewhere.
  • If the employer asks for a current year FPS/EPS/EA credit to be moved back to a previous year please explain that credits need to remain in the tax year they arise until the year has ended and have been confirmed as suitable for reallocation.
  • Any excess payment can be reallocated before the tax year has ended. You should only move the exact payment amount required and always include an explanatory ETMP history note.
  • The Effective Date of Payment (EDP) of ETMP credits reallocated to BROCS in some circumstances can cause processing problems for BROCS and delay update to customer records. When considering a reallocation from ETMP to BROCS, ensure the EDP is no more than 14 days in the future as BROCS cannot accept these. Some ETMP in-year credits have a future EDP applied so it is important to check because incorrect postings can delay processing.