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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: VAT: pre-enforcement action: enforceable dates

There are various appeal periods, which affect when certain debts may be recovered by distress. Do not demand these debts until the appeal period has expired.

Value Added Tax

Liability types Enforceable dates
   
Return Due date + 1 day
Prime assessment Issue date + 1 day
Default Surcharge Issue date + 1 day
NB: Default Surcharges can be subject to appeal and action should be held immediately if an appeal is received.  
  Officer’s assessment

Civil penalty

Interest 31 days from date of issue  
  Appealed assessment decreased 31 days from the original date of issue
  Appealed assessments increased; or  
decreased after an appeal or reconsideration 31 days from date of issue of the amendment

Reconciling IDMS and VISION

When deciding what action should be taken to recover a debt, IDMS and VISION should always be reconciled to ensure that the correct debt is shown on IDMS.

There are daily updates to IDMS from the VAT mainframe which will provide postings to account for payments received or adjustments made. These postings are outlined in the table below.

PYT Payment posting
   
AMD Charge amendment
DCH Dishonoured cheque
OAS Overpayment posting
REA Reallocation
REM Remission posting
S/O Stood Over

 

To view any postings received against a work item you need to access the Posting tab within the Interest Calculator - see IDMSUG800100.

 

Where a Stood Over (S/O) posting is sent to IDMS, the debt will need to be manually reduced on IDMS by the value of the S/O posting. Should the S/O posting be of a greater value than the debt, the debt should just be reduced to nil. When amending the work item, the ‘Close Work Item’ button should not be selected.

There will be occasions where a payment is received but not allocated to a liability (identifiable as a non-appropriated amount on the VISION LR screen).

Examples of why a non-appropriated balance is on file are that the payment:

  • doesn’t match the VAT return it was paid against
  • has been made in error by the taxpayer to the VAT account when it should have been made to another Head of Duty.

Where this happens the payment will not be notified to IDMS as a posting. IDMS will be advised of the full debt on the VAT into IDMS interface. Twenty four hours later a new unallocated payment signal will be sent to IDMS.

The unallocated payment signal on IDMS will be displayed on the Taxpayer Designatory Data Sign screen as ‘Unallocated Pyt’. The IDMS next action will be automatically set to review unallocated payment shown as ‘Rev Unalloc Pyt’ and the next action date will be set to ‘Today’.

Guidance on requirements to give instruction to Banking Accounting and Adjustment can be found in the VAT915 countersigning limits.

Following the appropriation of the payment, IDMS will be advised of any appropriate postings.

Twenty four hours later, IDMS will be advised that the unallocated payment signal can be unset, which is done automatically, unless any other payments are not appropriated.