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HMRC internal manual

Tax Credits Manual

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HM Revenue & Customs
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Manual payment - Offset manual payment

Background

This guidance can only be applied in cases where an Off System Manual Payment is due and there is an outstanding overpayment of more than £200.

An offset of a manual payment cannot be made if any of the following apply

  • Domestic Violence
  • Immediate Eviction
  • Bankruptcy or Insolvency
  • Error cases (Stuck cases)
  • NHS WAT

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

An offset of a manual payment can be made in the following circumstances

Joint claims

Note: The amount of an overpayment on a single claim can be divulged to a partner but not how the overpayment came about.

When both customers are available to give their agreement

  • offset can be made against either customers single overpayment

and

  • any overpayments relating to the same Household constitution.

When only one customer is available to give their agreement

  • an offset cannot be made.

Single claims

If the customer gives their agreement

  • offset can be made against any or all of their single overpayments

and

  • any of their previous joint overpayments.

Note: A manual payment can be set against cases upheld by a Tribunal decision.

Checklist

Before you follow this guidance make sure

  • you follow the guidance in TCM0138020
  • you have the correct user roles to follow this guidance. Use the B&C Roles and Access Catalogue. You can find this by going to the Benefits & Credits Homepage, selecting ‘R’ on the B&C A-Z index, selecting ‘Roles and Access Process’, selecting ‘Roles & Access Catalogue’ from the Related links menu
  • you are in the correct MU. Use TCM0322460 for the correct MU number.

Guidance

Note: When sending customer, staff or process data to another individual or team, make sure you follow the latest data security guidelines or contact the Data Guardian/Data Security Team for advice.

Step 1

Check whether there is an overpayment against which the manual payment can be offset.

Note: Both recoverable and class 4 remitted overpayments for all tax years on every application need to be checked.

Note: Archived Household Notes may need to be checked.

Note: Any overpayment relating to a year with an open dispute (DOP) or Appeal marker should be checked to see whether the action has been completed.

If there is an overpayment against which the manual payment can be offset, go to .

If there is not an overpayment against which the manual payment can be offset

  • manual payment must be paid to customer
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • return to the guidance you were following.

Step 2

Check Household notes for Compliance activity. Follow the guidance in TCM0134420.

If there is a Compliance message, follow the directions given in the message.

Note: When a Compliance marker is set you may need to consider contacting the Compliance Officer to check whether the marker is still relevant.

If there is no Compliance message, go to .

Step 3

Calculate and schedule the manual payments. For how to do this, use TCM1000491.

Contact the customer by phone to ask for their agreement to the offsetting of the manual payment. For how to do this, use TCM0094120

Note: Up to three attempts at various times should be made to contact the customer within 24 hours.

If the customer can be contacted by phone, go to .

If the customer cannot be contacted by phone

  • manual payment must be paid to customer
  • refer calculations to the Manual Payments team using the ‘Manual Payment referral form’
  • update Household Notes with the message PC26 by using TCM0168020. For how to do this, use TCM1000001
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • take no further action.

Step 4

If the manual payment relates to a joint claim, go to .

If the manual payment relates to a single claim, go to .

Step 5

Note: The amount of an overpayment on a single claim can be divulged to a partner but not how the overpayment came about.

Are both customers available and agree the offset of their manual payment

If both customers are available and agree to offset of their manual payment, go to .

If only one customer is available to offset of their manual payment, go to .

If neither customer agrees to offset their manual payment, go to .

Note: The customer can be provided with the DMB helpline number 0345 302 1429 so that they can make arrangements to pay back their overpayment.

Step 6

If the customer agrees to offset all their payment against their overpayment, go to .

If the customer agrees to partially offset their payment against their overpayment

  • note the amount the customer wants to offset
  • complete remission ‘Class 13 Official Error-Overpayment offset’. Follow the guidance in TCM0230080

Note: If the overpayment has previously been remitted under Class 4 this will need to be removed first.

  • issue ‘Offsetting Manual Payment’ letter to customer
  • update retained Household Notes with the message PC29 using TCM0168020. For how to do this, use TCM1000001
  • calculate new overpayment balance

Note: If overpayment was previously remitted under Class 4, re-remit balance under Class 4. Follow the guidance in TCM0230080 

  • go to .

If the customer does not agree to offset their payment against their overpayment, go to .

Note: The customer can be provided with the DMB helpline number 0345 302 1429 so that they can make arrangements to pay back their overpayment.

Step 7

Check whether the manual payment fully repays the amount overpaid.

If the manual payment fully repays the amount overpaid

  • establish the amount to remit
  • make remission under ‘Class 13 Official Error-Overpayment offset’. Follow the guidance in TCM0230080

Note: If the overpayment has previously been remitted under Class 4 this will need to be removed first.

  • issue ‘Offsetting Manual Payment’ letter to customer
  • update retained Household Notes with message PC28 using TCM0168020. For how to do this, use TCM1000001
  • go to .

If the manual payment does not fully repay the amount overpaid

  • establish the amount to remit
  • make remission under ‘Class 13 Official Error-Overpayment offset’. Follow the guidance in TCM0230080

Note: If the overpayment has previously been remitted under Class 4 this will need to be removed first.

  • issue ‘Offsetting Manual Payment’ letter to customer
  • update retained Household Notes with the message PC28 using TCM0168020. For how to do this, use TCM1000001
  • make note of the new overpayment balance

Note: If overpayment was previously remitted under Class 4, re-remit balance under Class 4. Follow the guidance in TCM0230080 

  • go to .

Step 8

Check whether there is a payment still owed to the customer.

If there is a payment still owed to the customer

  • refer calculations to the Manual Payments team using the ‘Manual Payment referral form’
  • go to .

If there is no payment owed to the customer, go to .

Step 9

  • refer Manual Payment allocation advice (Word 51.5KB) template (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • take no further action.

Step 10

  • manual payment must be paid to customer
  • refer calculations to the Manual Payments team using the ‘Manual Payment referral form’
  • update Household Notes with the message PC27 by using TCM0168020. For how to do this, use TCM1000001
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • take no further action.