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HMRC internal manual

Debt Management and Banking Manual

Pre-enforcement: coding out: Self Assessment (SA) and Tax Credit (TC) overpayments: further SA points: general

SA debts

All types of SA debts can be coded out for example POA1, Interest, Penalties, and so on.

Transfer of SA liability from SA to PAYE: automatic transfer of balancing payment to PAYE

Since 4 October 2002, balancing payments arising from 2001-02 SA tax returns and later years, captured in the period 6 April to 31 December inclusive, that meet the conditions for transfer, have been automatically transferred to PAYE - SAM141010 gives more details.

These cases appear on the SA View Statement screen with a description of ‘Included in PAYE code for year YY/YY’. You should redirect queries about these cases to PT Operations.

In July 2011, DMB introduced a new process to code out debts. Suitable cases in IDMS are sent to NPS and if accepted for coding out, a type 16 remission is posted on SA. These cases appear on the SA View statement screen with a description of ‘Amount included in tax code for YY/YY’. Queries about these cases should be dealt with in accordance with DMBM618000 and DMBM618300.

If you receive a coding out query and the amount is not showing as included in the PAYE or tax code on the SA View Statement screen (full details above) you should check IDMS. If action history notes indicate ‘Awaiting confirmation of coding out £000.00’ or the debt is held in OU MU 333700 you should deal with in accordance with DMBM618000 and DMBM618300. Otherwise, you should redirect the query to PT Operations.

You must not tell the taxpayer that coded out amounts are no longer outstanding, or are cleared. Debts sent for coding out are still outstanding until the amount has been successfully collected through the PAYE code. Any amounts coded out that are not successfully collected in the customers PAYE code, will be released and collection resumed in SA.