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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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Time To Pay: Time To Pay requests: Self Assessment cases

One of the principles of Time To Pay (TTP) is that future returns and payments are made in full and on time.

Future amounts becoming due should be included in a SA TTP arrangement where the arrangement spans any future payment(s) due date(s). Customers should be encouraged to include both the current and future amounts in the arrangement rather than offering to pay any future amount(s) in full on the due date, whilst continuing to pay the earlier debt by instalments.

This will benefit both the customer (by reducing the amount of interest they have to pay) and HMRC (as the oldest debt will clear sooner).

In addition to this SA allocates payments firstly to debts with the oldest statutory due date. This would mean that if a customer made a payment they intended to clear POA2 whilst still owing some of POA1, then the payment intended for POA2 would in fact be automatically assigned to POA1.

In some TTP cases this would cause the Instalment Arrangement to clear and automated action to be taken to recover the outstanding balance, even when the customer has paid as agreed.

Including future amounts in the arrangement

When you agree to a TTP that will span the next payment date you must make sure that you include any charges recorded on SA2000 when you set up the Instalment Arrangement.

Case not in IDMS

Where the case is not on IDMS and is in SA only you should set up the arrangement on SA for all amounts that are included in the arrangement. When the first amount becomes due the TTP details will pass to IDMS and will also include the amounts becoming due.

Case in IDMS

Where the case is in IDMS, before you create the Instalment Arrangement, you must create a pseudo work item for the amount to be included in the arrangement. You should only create a pseudo WI when there is a charge on SA and the pseudo WI must exactly match the charge on SA.

Once you have created the pseudo work item you should link this to the existing WI(s) and set up the Instalment Arrangement to include the overdue amount and the amount becoming due.

Charge not on SA

If there is no charge on SA you cannot include the future amount when setting up the Instalment Arrangement. This may happen if the TTP arrangement extends beyond when the next return is due.

In these cases you won’t know the exact amount that is due until the relevant returns have been submitted and processed. Cases like this should be rare as arrangements over 12 months are exceptional and those exceptions are likely to occur in cessation cases where the customer will not accrue any further liability.

When arrangements extend beyond the next balancing payment due date you should base the TTP arrangement on the principle that the amount owed for the current year and future years will be the same as the amount owed for the previous year (unless the customer advises otherwise). In these cases should set a review BF for a date before the next balancing payment is due. When reviewing the case you should check:

  • that the returns has been submitted
  • how much is due.

You need to consider the customer’s overall debt position. If the customer’s debt is increasing or is not decreasing at a rate that will clear the TTP within the agreed timescale you should consider contacting the customer to discuss the situation or cancelling the arrangement.

Where the customer’s debt is decreasing in line with what was agreed you should follow the guidance below and include the new amount in the arrangement and issued a revised TTP agreement letter to the customer.

Next payment becoming due not included in the arrangement

Where possible you should try to include the amount becoming due in the arrangement. Where the customer advises that they will fully pay the next liability on time and do not want it including in the arrangement you must:

  • set a review BF on the case after the due date of the next liability so that you can correctly reallocate the payment on SA
  • reset the Instalment Arrangement on IDMS as appropriate.