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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: minus type 16 remissions and CESA

Amounts removed from the PAYE code by NPS before coding out commences

Amounts that have been accepted for coding out by NPS may later be removed from the PAYE tax code before coding out commences on 6 April. This might be because a taxpayer’s circumstances have changed; for example, deceased or another higher priority debt is included in the code. Note that if the taxpayer ceases employment, it is not treated as a change in circumstances; the debt will remain in code until reconciliation takes place.

If this happens, NPS(PAYE) will send an update to CESA notifying that the amounts are no longer included in the PAYE code and CESA will automatically:

  • minus remit the whole amount of the type 16 remission and the debt will become collectible
  • create an automatic SA Note of ‘amount, charge type and year removed from tax code for YY/YY’.

Amendment reduces an SA debt accepted for coding out

Where an SA debt which has been accepted for coding out in NPS(PAYE) is reduced, SA will automatically minus remit the full amount of the type 16 remission and create an entry on work list W012 ‘Remissions and remission cancellation quality assurance’ for manual review.

Note: It is important that these work items are worked on a daily basis to minimise the risk of collecting too much tax in the PAYE code. See the appropriate Standard Work Instruction (SWI) for guidance on how to deal with these cases.

SA updates to IDMS and SA Online

The SA system will pass the debt back to IDMS, either:

  • overnight, if there are other work items already in IDMS
  • at the next weekend update, if there are not.

CESA will include a signal with these debts so that IDMS can identify an attempt has been made to code out and move the debt to an appropriate segment within the DMB campaigns.

SA will also send an update to SA Online.

Statement issue

Type 16 remissions will not prompt the issue of a SA monthly or periodic statement.

Minus type 16 remissions will not prompt the issue of a SA monthly statement but will prompt the issue of a periodic statement.

For more information about periodic statement issue see SAM131026.