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HMRC internal manual

Debt Management and Banking Manual

Pre-enforcement: Linking direct and indirect taxes: Background


When HMRC was formed the Day 1 Handbook set out limited criteria such as Time to Pay to advise when you needed to check for combined debts as well as some basic principles for handling combined debts at the pre-enforcement stage. This guidance was incorporated into DMBM800000.

Chesterfield Trial

A ‘Debt Linking’ review was conducted which concluded that joint action was only being taken on direct and indirect taxes for a small number of debts. The Review showed the potential for significant improvement in performance by allowing Debt Management Units to search, link and pursue direct tax debts.

Our current IT systems cannot automatically link debts for the same customer across the different regimes. A project was conducted in Chesterfield using manually linked indirect and direct Tax Debts which were then worked together.

The project aims were to give:

  • efficiencies in the following areas (confirmed and supported by Management Information):

    • a reduction in the duplication of work; letters or phone calls that were previously handled by separate Direct and Indirect Offices
    • more debts will be linked and worked together; creating a saving in court fees
  • progression towards a single customer account
  • demonstrate the following to help with future decisions:

    • the volume and value of successful debts linked
    • the volume and value of successful joint actions
    • the volume and value of money recovered
    • the volume and value of small, clean Indirect debts (less than £500) and small, linked (Direct and Indirect debts) debts that could be centralised.
    • work item reductions
    • resources used (by grade and hours spend)


Following this trial the small debt unit was created as it was proved that concentrated efforts on these lower debts had successful results.

For more information on this see DMBM600040 and DMBM600050.