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HMRC internal manual

Repayment Claims Manual

HM Revenue & Customs
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Issuing manual payable order: Liability unpaid after due date

Liability which is unpaid after the due and payable date has passed is called an arrear.

The existence of arrears will in most cases be obvious from forms such as C87 or 12/EO/AD Pin the front of the file.

When there are arrears for more than one assessment, follow the general rule that you set overpayments against oldest first.

When you decide to make a set-off take the following steps.

Step Action
STEP 1 Telephone the office which is recovering the arrear except where it is the Accounts Office
  • tell them the amount of the overpayment including supplement where applicable
  • ask whether set-off can be made.    
      STEP 2 If you get agreement to the set-off or the arrear is one working with the Accounts Office the action you take depends on where the assessment which is in arrear was made.
      Own District If the assessment was a CODA assessment made in your own District use AP to make an informal stand over of the amount of the arrear to be cleared by set-off.
    For arrears on assessments made prior to CODA issue form DZ41 to the Accounts Office. Issue form 41B-1 to the Collector in respect of pre-ADP arrears.    
      Another District In the arrear relates to an assessment in another District, telephone the District
  • tell them the amount of overpayment including any supplement
  • ask them to make an informal standover of the amount of the arrear to be cleared by set-off
  • ask them to confirm within seven days by memo or partially completed form of the R90 series


  • what set-off if any you can make
  • details of the relevant assessment
  • where to send the payable order
  • the amount of any tax to remain stood over after the set-off.    
      STEP 3 In all cases write to the claimant or agent
  • include a computation of the amount of the overpayment and any supplement due
  • give details of the set-off you propose to make but do not ask for agreement to the set-off
  • put the file on BF for 14 days to allow the claimant time to object to the proposed set-off.
If no objection is received, proceed with the set-off (RM2624). If the claimant objects, within 14 days, to proposed set-off send the papers immediately to Central Policy (Tax Administration Advice Team), Stockport.