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HMRC internal manual

Debt Management and Banking Manual

Pre-enforcement: coding out: Self Assessment (SA) and Tax Credit (TC) overpayments: change of circumstance between initial acceptance and start of tax year

If there is a change of circumstance, for example deceased or another higher priority debt is to be included in the code, between initial acceptance and start of tax year NPS(PAYE) will:

  • do a coding check taking into account the customer’s level of income and any other underpayments to be coded to ensure the total of amount is below £17,000.00, and that inclusion of the debt does not double the customer’s liability or take more than 50 per cent of the their income
  • determine which debts can still be coded as well as any that will now be rejected
  • notify the Head of Duty (HoD) system that the debt can no longer be coded out
  • record the details in Contact History.

Note that if the customer ceases employment, this is not treated as a change in circumstances; the debt will remain in code until reconciliation takes place.

The HoD system will post a minus type 16 remission and will send the debt back to IDMS as per existing IDMS rules.

IDMS will recognise that a previous attempt has been made to code this debt out and the work item will be selected for other appropriate campaign action.