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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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Debt and return pursuit: PAYE: end of year: overpayments: clerical process

Overpayment reconciliation

BROCS and IDMS will record any previous actions and it is good debt management practice not to repeat any of these within a short period of time. When pursuing outstanding returns or resolving overpayments, you should aim to co-ordinate this with any other outstanding returns, including CIS (see DMBM522170), unpaid liabilities, including penalties the employer may have at the same time.

Part Returns only received

You should pursue the employer or contractor for any missing returns - see DMBM522130.

All returns received

Once all expected returns have been received and processed, if an overpayment still remains then to enable the year to ‘balance’ the overpayment will have to be moved from the BROCS record. This can be done by either moving the overpayment to Permanent Overpayments (POP), reallocation or repayment.

For overpayments over £500, the employer/contractor will need to give an acceptable explanation on why the overpayment arose before you can either reallocate or repay.

To check if an overpayment is genuine, see:

Under Section 130 Finance Act 2008, HMRC can reallocate an overpayment to any existing debt without permission from the taxpayer and you must therefore check for any outstanding amount before considering repayment. (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)
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  • (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)

Note: Where a limited company is involved you must check to see if the company has been dissolved and struck off. If it has then refer to DMBM522590 for disposal instructions as POP/repayment/reallocation is not appropriate in such cases.