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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
, see all updates

Time To Pay: Time To Pay requests: income & expenditure

Recording Income and Expenditure information

IDMS has an income and expenditure section and this should be used whenever it is available. When it is not possible to use IDMS the details should be recorded on the 36A1 Income and expenditure form (found on SEES Forms and Letters).

Income and expenditure details should be retained for a period of 12 months from the end of the Time To Pay (TTP) arrangement.

What information should we collect?

We are interested in the income and expenditure of the customer that has the HMRC debt. By determining the customer’s income and expenditure we will arrive at a figure of disposable income that will help us to judge the customer’s ability to pay their debt.

Where the customer lives with other people we do not need to know about the income of other people in the household, and we are only interested in the income and the expenditure of the person with the debt.

In some cases it may not be easy for the customer to apportion items of expenditure when bills are shared. If the customer is struggling to work out their share of household expenditure then they can quote the total household expenditure. Where they do this they must advise us how much other members of the household contribute towards household expenditure and we will record this contribution as income.

Reviewing the answers given

When you are asking the customer about their expenditure you should accept the information you are given at face value. There may be occasions where you ask the customer for an explanation of a figure, see Discretionary Expenditure figures below.

If you are still unsure of a figure that a customer has given to you, you can ask for supporting documentary evidence from the customer.

Trigger figures for expenditure

Below are trigger figures for expenditure. When you are collating income and expenditure information you should be aware of these figures and if the customer advises you that their expenditure is in excess of these figures you should consider asking follow up questions to find out why.

The trigger figures are a guide only and you should generally accept the figure that the customer provides if they can give you a reasonable explanation for example higher than average costs where they have caring responsibility for a disabled person. Where the figures provided are less than those outlined below they should be accepted without question.

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Areas of Expenditure

The discretionary expenditure figures only cover certain categories of expenditure (defined below). Some areas such as mortgage or rent do not have a trigger figure as these items can vary widely from household to household and people rarely have much real control over these items.

Phone

This expenditure category is comprised of expenditure on home phone (line rental and calls), mobile phone and other (e.g. international phone cards, use of public/pay phones)

Item on I & E form: Telephone mobile/rental

Item on IDMS: Telephone

Travel

This expenditure category includes money spent on public transport, taxis, car insurance, road tax, fuel (diesel, petrol etc), MOT and car maintenance, breakdown or recovery, parking charges or tolls.

Item on I & E form: Fares & motoring

Item on IDMS: Fares & Motoring expenses

Housekeeping

This expenditure category covers money spent on food and milk, cleaning and toiletries, newspapers and magazines, cigarettes and tobacco, alcohol, laundry and dry cleaning, clothing and footwear, nappies and baby items and pet food.

Items on I & E form: House Keeping

Items on IDMS: Household Expenses & Children’s clothing

Other expenditure

This expenditure category covers health costs (dentist, glasses, prescriptions etc), repairs and house maintenance, hairdressing/haircuts, cable, satellite and internet, appliance rental (TV, DVD etc), school meals and meals at work, pocket money and school trips, lottery and pools etc, hobbies/leisure/sport, gifts (Christmas, birthdays etc) vet bills and pet insurance

Items on I & E: TV rental (do not count the licence fee towards the trigger figure), Health and Other

Items on IDMS: Health & Media