Set-offs - S130 FA2008: set-off between direct and indirect taxes
Direct tax staff should continue to follow the existing accounting procedures to transfer payments across direct taxes.
When an indirect Debt Technical Office (DTO) establishes that a customer with a debt is due a direct tax repayment which can be set-off in total or part against the indirect tax debt they will:
- contact the appropriate (direct) DTO for the customer
request that the set-off be made and provide the following information for the amount to be correctly allocated against their debt.
- VAT registration number (or Non-VAT reference if the set-off is against a Non-VAT indirect tax debt)
- The period of debt the overpayment is to be set against
- The traders name
- The amount of the set-off
- The effective date of payment
Direct tax colleagues will:
- reallocate the overpayment from the Head of Duty system (SA, BROCS and so on) to the Overpayments and Accounting Summary (OAS) and provide the allocation information as detailed above
- note the disposal instructions on action history on the appropriate system
- advise the Accounts Office OAS appropriately.
Accounts Office staff will use function INP218 to move the payment to the 117 listing.
From there the relevant banking team will transfer the payment via the 117 system to the 108 collection (Southend) together with the allocation details for allocation against the relevant indirect tax debt.
Direct taxes must advise the customer in writing that the set-off has been made see DMBM700040 and e mail a copy of the letter to the indirect tax colleague who requested the set-off.