HMRC internal manual

PAYE Manual

PAYE47125 - Employer returns: employer return - overpayments: using function overpayment disposal

The use of EBS Function OVERPAYMENT DISPOSAL is appropriate to provide the following types of disposal automatically for an overpayment arising in tax years CY-1 to CY-4 inclusive

  • To repay the whole overpayment to the employer or contractor
  • To reallocate the whole overpayment to CY
  • To transfer an overpayment to the Permanent Overpayment account where the amount does not exceed £10 


1. Where the overpayment disposal instruction required is different from the above the disposal instruction must be made manually on a form P565. ‘Completion of form P565 request stencil’ at PAYE47021 provides further details.
2. An officer of officer grade or above will authorise the disposal using Function AUTHORISE OVERPAYMENT DISPOSAL.

That officer must 

  • Establish from the evidence provided by the officer that the overpayment is correct


  • Not be the same officer who has reviewed the validity of the employer overpayment and used Function OVERPAYMENT DISPOSAL to create the disposal instruction

It is essential that prior to issuing any type of overpayment disposal instruction that the procedures in ‘Overpayment notification (Action Guide)’ at PAYE47061 have been followed in all cases.