DMBM610030 - Pre-enforcement: interest in enforcement proceedings: tax and interest paid before proceedings
The majority of this manual will be archived on 30 Apr 2024. If there is content within this manual you use regularly, email hmrcmanualsteam@hmrc.gov.uk to let us know.
This instruction applies where payment is made before proceedings have commenced, that is before a distraint call is made (not Scotland) or before a claim form or summons is issued in court proceedings. Payments received after proceedings have commenced are dealt with in the sections of this manual relating to the particular means of enforcement.
SA, CTPF and CTSA
For SA, CTPF and CTSA interest will be calculated automatically after payment is made. Any shortfall of interest, irrespective of the amount, will be rolled forward and collected with any subsequent liability.
For CTPF and CTSA cases(This content has been withheld because of exemptions in the Freedom of Information Act 2000), COTAX will automatically raise an interest charge for the amount paid. If exceptionally the clerical interest indicator has been set, you will have to raise the interest charge manually on the appropriate Head of Duty (HOD) system.
SAFE charges
SAFE will calculate interest for any interest bearing charge for which it has accounting responsibility. Where interest cannot be calculated automatically because, say the clerical interest signal is set, SAFE will output an entry to a worklist for the SAFE team to calculate the charge clerically.
Other charges including Schedule D legacy
For other interest-bearing charges, where tax and interest is paid before you start proceedings, you should calculate the interest to the effective date of payment.
If the payment leaves unpaid interest (This content has been withheld because of exemptions in the Freedom of Information Act 2000) raise the interest charge to the date of payment. Where the unpaid interest is for £100 or more, continue the enforcement action. If the unpaid interest is less than £100, write to the debtor demanding payment and enclose a payslip. Do not commence enforcement action until another debt becomes due which brings the total amount owed to £100 or more.
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
Dealing with the payment
On the same day that you receive payment
- prepare two payslips: one for tax/NIC and one for the interest
- check that the total of the payslips agrees with the amount paid and
- send the payment and payslips to Banking Operations.