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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: contract settlements: customer response - time to pay

If the customer says that they can not afford to pay in one lump sum but time to pay is an option follow the guidance contained in DMBM800000.

However there is no question of the contract being renegotiated and the relevant date for interest remains unchanged. This should be clearly explained to the customer.

Direct Debit

Direct debit electronic payment is the preferred method for time to pay and should be encouraged in all appropriate cases at every opportunity. It is to be used in cases where the arrangement exceeds three months or where the arrangement provides for payment by six or more weekly instalments.

You should obtain an initial payment, preferably by debit card whilst the Direct Debit is being set up.

If the time to pay arrangement includes more than one debt type you will need a separate Direct Debit mandate for each.

You will find more information about direct debit at DMBM200170.

Linking debts included in the arrangement

If you agree an arrangement for debts in addition to the contract settlement:

  • arrange to transfer other outstanding work items and the Taxpayer Record(s) to your office
  • create a Work Item on IDMS for VAT debts
  • use IDMS to cross reference and manually link all debts.
  • select the Contract Settlement work item as the master reference (the IDMS Officer Support Pack shows you how to manually link work items on IDMS)
  • set up the arrangement using IDMS INSTALMENT ARRANGMENT (the IDMS Officer Support Pack shows you how to set up an instalment arrangement on IDMS).

If you have negotiated a Payment on Account (PoA) followed by regular instalments you should wait until you have received the PoA before creating the item on IDMS.

Customers address in England and Wales

For cases with an address in England & Wales you should choose CCP from the enforcement action options on IDMS.

IDMS will

  • print a confirmation letter
  • prepare the payslips using PRINT PAYSLIP
  • post the letter with the accompanying payslips to the customer.
  • monitor the arrangement and in default create an IDMS Action History note regarding the default and refer the Work Item to C/W Miscellaneous with next action of ‘IA Review’
  • issue IDMS8 reminder letter for each payment default
  • issue a IDMS9 (Default enforcement warning letter) if the reminder does not produce payment
  • move the work items to the CCP role.

IDMS automatically prompts a review after six months; see DMBM800230.

Scotland & NI Cases and those that include VAT

You should always;

  • check the inhibit letters option on new instalment
  • issue the confirmation letter IDMS7 via LFC.
  • post the letter with the accompanying payslips to the customer.

IDMS will:

  • monitor the arrangement and in default
  • create an IDMS Action History note regarding the default and
  • refer the Work Item to C/W Miscellaneous with next action of ‘IA Review’

If the customer defaults on the arrangement you should follow DMBM565130.