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HMRC internal manual

Debt Management and Banking Manual

Pre-enforcement: coding out: Self Assessment (SA) and Tax Credit (TC) overpayments: NPS initial coding check

From 5 April 2012, IDMS debts can be sent to NPS (PAYE) for an ‘initial coding check’ before we issue the ‘coding out’ IDMS99 letter advising of our intention to consider coding out this debt. This means that the debt details are sent to NPS (PAYE) and the hypothetical call to code is run against the debts to see if they can be coded out (see DMBM618345). If this initial coding check is successful, we issue an IDMS99 letter advising the taxpayer that we will attempt to code out the debts. If this check is unsuccessful, the case will be moved away from the coding out campaign into a new DMB campaign strategy.

IDMS will keep a record of the total amount of the total debts already sent to NPS for each taxpayer to ensure that we do not attempt to code out more than £17,000.00 per coding out year.

NPS (PAYE) will update IDMS with the results of the initial coding check but no debt details will be retained in NPS (PAYE) at this stage and NPS Contact History will not be updated.

Only when the debt is sent for the second time, after the IDMS99 is issued, at the hypothetical call to code stage, will the details be visible on NPS (PAYE).

Appendix A (Word 166kb) illustrates this process for SA underpayments.

Appendix B (Word 198kb) illustrates this process for TC overpayments.