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HMRC internal manual

Debt Management and Banking Manual

Time To Pay: Time To Pay requests: offsetting losses

Introduction

In certain circumstances we can take into account the fact that a customer is making a loss in the current year when deciding whether to grant Time To Pay (TTP) for Income Tax or Corporation Tax due on profits from last year.

Conditions

The conditions that must be met before we can consider if we can take into account current year losses are that the customer:

  • must be genuinely unable to pay immediately or enter into a reasonable TTP arrangement
  • the tax owed is Corporation Tax or Income Tax on previous years’ profits
  • the customer is likely to make a loss in the current year.

Where these conditions are met, the case will be passed to a CT Services team who will review the case and will contact the customer to discuss their current trading situation.

Referring the case to Compliance

When a customer has contacted DMB and the customer meets the conditions for taking current year losses into account, you should:

  • update IDMS, complete the Offsetting Losses stencil (Word 135KB), and email this to (This content has been withheld because of exemptions in the Freedom of Information Act 2000)  with the subject of the email as “Offsetting losses request”– Time to Pay plus the MUID; in BPSS, emails will automatically be produced when ‘Offset Losses’ is chosen as the Selecta outcome
  • set a BF on the case for (This content has been withheld because of exemptions in the Freedom of Information Act 2000) .

CT Services actions

When the CT Services team receive the email, they will:

  • review the case
  • check that the customer meets the conditions above
  • contact the customer to discuss the current trading situation
  • ask for documentary evidence to support the loss (where appropriate).

Where CT Services deem that the claim is reasonable they will arrange for the appropriate amount to be stoodover and a note entered on COTAX.

Where a collectable balance remains or the customer does not meet the conditions to offset their anticipated loss then an eForm entitled Time to Pay will be sent to:

DM CT Campaign SPOC

https://eforms.apps.hmrci/Case/CreateCase

Referrals from Compliance

Occasionally, Compliance may receive requests for set-off of loss claims directly from customers. Compliance will contact the customer and advise them to contact CT Services on 0300 210 3410 to discuss payment options prior to consideration of the claim.