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HMRC internal manual

Labour Provider Guidance

Yield and Measures: cash collected

Key principles of cash collected

The key principle is that Cash Collected is the amount that the Department reasonably expects to collect.

Items arising as a result of correcting things that have already happened and ensuring revenues due are paid or there is a reasonable expectation of payment. This includes:

  • Debts collected as a result of LM debt pursuit action
  • Assessments
  • Settlements
  • Determinations
  • Interest
  • Penalties
  • Missing VAT returns - the additional tax identified in excess of the central assessment if the return is received and paid as a result of LM action

If the evidence shows that HMRC do not expect to collect the additional tax due, then the amount of Cash Collected should be adjusted accordingly.  

You should always ensure that you have a full audit trail to demonstrate that you considered whether there was a reasonable expectation of payment.

It is important that if yield is not claimed due to an assessment/settlement which is not expected to be paid, that the supply chain is followed to establish where the workers have gone. Once established FRB could then be claimed – see LPOG10300 

Cash collected cannot be claimed for a period where we have already claimed FRB/RLP in a case.

More guidance is available COG17105 and COG18105 

Calculating cash collected

Net additional liability on VAT assessments, i.e.the additional tax due as a result of an intervention. 

Tax charged on direct tax assessments, determinations etc. when an enforceable debt has been established and any appeal, challenge etc. is unlikely - effectively when dialogue is at an end.

Assessment/Settlements: All tax, interest and penalties raised excluding any amount already in charge by way of returns/central assessments etc.

Yield claimable on TTP agreements - TTP agreements must be in accordance with the guidance at LPOG7300. Yield can be claimed for payments made relating to the arrears of tax‎ that are subject to the TTP agreement. Future liabilities that become due during the TTP agreement cannot be claimed even though it is a condition of the TTP agreement that they are paid on time. If however these future liabilities fall due and payments are not made on time and become arrears and are subsequently recovered due to further LM action they can then be claimed.

Any tax collected using devolved Debt Management powers which has not already been claimed. Cash collected may also be applicable if revenue is collected through POCA

Beware of double counting!                                                                                                                                                                    

Case owners and team leaders should ensure where intervention activities overlap there is a clear audit trail to show there is no double counting.

Examples of range of yield claims for LM Interventions (LPOG10500)

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Recording Cash Collected Yield

Results are recorded on Caseflow - guidance can be found under the Compliance Operational Guidance (COG) under Caseflow 2