Contract settlements: acceptance: SAFE - handling general payments on account
The guidance about contract settlements at EM6000+ only relates to direct tax. You must never include VAT or VAT penalties in a contract settlement.
This page explains how to handle payments on account. You must make sure that all general payments on account are locked straight away. Details of how to do this are further down the page.
General procedure for payments on account
General payments on account are normally received in advance of a settlement charge being raised. Before the payments can be entered on SAFE, a customer account with a unique 15 character SAFE customer reference must be created by the SAFE nominee or, if you work in what was formerly Local Compliance, the Centralised SAFE Team.
You must ask the SAFE nominee or the Centralised SAFE Team to set up a SAFE customer account and provide you with the SAFE customer reference, as soon has you believe that there may be additional tax to pay. Do not wait until after you have requested a payment on account.
As soon as you have established that there is additional tax to pay, you should normally request a payment or payments on account. EM1940 explains the circumstances when you must not request a payment on account. When requesting payments on account you must ask the person to quote the 15 character SAFE customer reference as a payment reference number. You should explain that this should not be used as the reference to make any other payments to HMRC.
If you are asking the Centralised SAFE Team to set up a Customer account, you must send an email, providing the customer’s name, address and head of duty reference, for example the UTR or BROCS ref, to the SAFE Team. Include in the subject line ‘Set up customer record’. A SAFE nominee will require the same details.
General payments on account are held on the customer account and remain there unallocated until a charge is raised. The SAFE nominee or the Centralised SAFE Team can view them by selecting ‘View Customer Account’. SAFE is designed to expect payment of a charge in 30 days so payments on account are only allocated to a charge 30 days before the due date.
Where payments on account are made in advance of the charge and are unallocated, SAFE will automatically allocate them to the next charge becoming due. This means that in some circumstances SAFE may incorrectly allocate them against other charges unless the payments are locked. As soon as you are made aware that a payment on account has been made you must take the action below to lock the payment.
To prevent payments being incorrectly allocated, you must make sure that all payments on account held in SAFE are locked.
As soon as you are aware that a payment has been made, either directly to you or DMB, you must
- complete the stencil SAFE 3 (POA) Locking Stencil, which is available in SEES and
- send the appropriate eform to the Miscellaneous Charges Unit.
When completing SAFE stencils you must include your Compliance Identifier in the caseworker’s details section of the stencil. Where to find this or what to include will depend on your business unit. If you work in
- For what was formerly Local Compliance, see the guidance that is currently in LC Memo 08/11
- SI, you should include the following in this format - SI/Region/Location/PID
- CAR PT International guidance, you should include the following in this format - CAR/PTI/EC/Caseflow ref/PID.
When you are ready to settle a case you should ask the SAFE nominee to check what payments are held on SAFE. You should then follow the guidance at EM6403. The SAFE nominee or, if you work in what was formerly Local Compliance, the centralised SAFE Team must ensure that payments are unlocked on the same day the charge is raised. The way to contact the Miscellaneous Payments Unit depends on whether the SAFE charge is raised before or after 2pm
If excessive payments on account have been made, either
- complete a SAFE repayment stencil (SAFE 1 new) if the excessive amount is to be repaid, or
- complete a SAFE transfer of payments stencil to re-allocate the excessive payment(s)
There are two types of ‘transfer of payment stencils’. One is to re-allocate payments to a different Head of Duty system, for example Self Assessment. The other is to re-allocate payments to another SAFE reference.
All these stencils are available in SEES. Completed stencils must be sent to the Miscellaneous Charges Unit.