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HMRC internal manual

Tax Credits Manual

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HM Revenue & Customs
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Payment - overpayments (F-P): Overpayments - Individual Voluntary Arrangement reported

Checklist

Before you follow this guidance, make sure

  • 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
  • you have access to the VAS spreadsheet (VAS 37/2) and Insolvency Register.

Required information

Obtain the following information from the VAS spreadsheet

  • customer’s name
  • customer’s NINO
  • date of the Individual Voluntary Arrangement (IVA)
  • whether it is a joint IVA or a single IVA.

Background

An Individual Voluntary Arrangement (IVA) is set up by a customer in order to pay a proportion of their debts. The IVA is usually set up when the customer’s debt is too large for them to pay back their creditors at the required rate. The customer makes an amount of money available and the creditors bid for a portion of it.

The Voluntary Arrangement Service (VAS) deals with IVAs. The VAS spreadsheet (VAS 37/2) provides details of all the IVAs that have an outstanding tax credits award and is updated on a weekly basis. This is held in a secure shared folder. There is also an Insolvency Register.

VAS will also include on a spreadsheet any failed and terminated IVAs. When a customer fails to keep up payments under the terms of their IVA you may need to reinstate normal recovery of their tax credits overpayment. VAS will instruct you when you need to do this.

If the customer is a member of a joint household then, if only one customer has entered into an IVA , the tax credits overpayment will continue to be recovered from the other customer. This is because both members of the household are jointly and severally liable for the overpayment

You may also receive correspondence notifying you of an IVA from the customer or their Insolvency Practitioner. HMRC does not require authority from the customer to deal with queries from the Insolvency Practitioner. However, it will be appropriate to refer most correspondence from Insolvency Practitioners - for example, notifications of changes to the IVA - to VAS (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

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 or Data Security Team for advice.

Step 1

Note: If both customers have set up an IVA at the same time, they will both appear on the VAS spreadsheet. You need to consider each entry separately in order to establish if there is any debt relating to previous claims either as a single person or as part of another household.

Note: Customers in a joint household may have their IVA approved on different dates. This may result in entries on the spreadsheet that appear to have been duplicated but they must be worked as new entries.

If you are dealing with a WAM referral, go to .

If you are dealing with a new entry on the VAS spreadsheet

  • enter the following details from the VAS spreadsheet onto the IVA worksheet (Excel 26KB)
  • customer’s name
  • customer’s NINO
  • IVA date and the tax period it relates to
  • partner’s details, if appropriate

then

  • go to .

Step 2

If the WAM referral says that there is not a record of an IVA

  • send the customer the lines to take (IVA1)
  • update the Debt Recovery category of Household Notes with the message OE22 fromTCM0166020. Make sure you select the ‘Retained’ checkbox. For how to do this, use TCM1000001
  • take no further action.

Step 3

If a partner is shown on the VAS spreadsheet, go to .

If a partner is not shown on the VAS spreadsheet, go to .

Step 4

Check the tax credits computer to determine if the customer has a partner. For how to do this, use TCM1000129.

If you are not authorised to access the case

  • follow the guidance in TCM0068160
  • take no further action.

If there are no tax credits claims for the NINO provided

  • trace the correct NINO. For how to do this, use TCM1000115
  • go to .

If the customer does not have a partner, go to .

If the customer has a partner not listed on the VAS spreadsheet

  • check the Insolvency Register to determine if the partner has already set up an IVA

Note: Where the partner does not have an IVA, you must work the IVA entry as a joint household with only one customer in the IVA.

Note: Where the partner does have an IVA, you must work the IVA entry as a joint household with both customers in an IVA.

  • make a note of your findings on the ‘IVA worksheet’
  • go to .

Step 5

If you are able to trace the correct NINO, go back to to check for a partner.

If you are not able to trace the correct NINO, take no further action.

Step 6

Check Household Notes for an existing IVA message. For how to do this, use TCM1000067.

If you are not authorised to access the case

  • follow the guidance in TCM0068160
  • take no further action.

If there are no tax credits claims for the NINO provided

  • take no further action.

If you are dealing with an entry on the VAS spreadsheet that is already been worked based on exactly the same IVA details,

  • take no further action.

If you are dealing with an entry on the VAS spreadsheet that has not been worked before, go to .

If the customer’s details have been included because the IVA has failed, go to .

Note: Failed IVAs will be entered on the VAS TC Book 4 Failed spreadsheet in either red or blue text and the letter ‘F’ will be entered in column ‘AL’.

Step 7

Check if the customer has been part of another household. For how to do this, use TCM1000301.

Note: In joint household cases where both customers have an IVA check whether both customers have been part of another household.

If the customer has been part of another household

  • check Household Notes for a message that either customer has taken out a time to pay (TTP) arrangement with DMB following the household breakdown. For how to do this, use TCM1000067
  • check Household Notes for a message that either customer has been discharged from bankruptcy. For how to do this use TCM1000067

Note: You will need to check all household notes including old notes for all years.

  • complete an IVA worksheet (Excel 26KB) for each household
  • go to .

If the customer has not been part of another household

  • check Household Notes for a message that either customer has taken out a time to pay (TTP) arrangement with DMB following the household breakdown. For how to do this, use TCM1000067
  • check Household Notes for a message that either customer has been discharged from bankruptcy. For how to do this use TCM1000067

Note: You will need to check all household notes including old notes for all years.

  • complete an IVA worksheet (Excel 26KB) for each household
  • go to .

Step 8

Check Household Notes to find the date the customer reported the change to their household. For how to do this, use TCM1000067

If the customer reported the change on or before 5 April 2012 within 93 days of the household breakdown

  • go to .

If the customer reported the change on or after 6 April 2012 within 31 days of the household breakdown

  • go to .

If the customer reported the change on or before 5 April 2012 over 93 days since the household breakdown

  • complete a referral for the Notional Entitlement team. Follow the guidance in TCM0224140
  • when you receive a reply from the Notional Entitlement team, go to .

If the customer reported the change on or after 6 April 2012 over 31 days since the household breakdown

  • complete a referral for the Notional Entitlement team. Follow the guidance in TCM0224140
  • when you receive a reply from the Notional Entitlement team, go to .

Step 9

Check for any finalised awards, terminated awards or Statements Of Account (SOA) to be included in the IVA calculation and make a note of the relevant dates on the ‘IVA worksheet’. For how to do this, use TCM1000195.

  • Enter the latest date before the tax year the IVA falls in on the IVA worksheet (Excel 26KB)

Note: A finalised award will have an award type of ‘Final Act’, ‘Final As Act’ or ‘Final Man’. An award type of ‘Final Est’ does not count as a finalised award for an IVA. Any ‘Fin Est’ award type should only be included as long as it has a prior finalised award of the same amount.

Note: Where the customer has submitted more than one claim and there is not a finalised award or SOA on the latest claim, you must check the previous claims.

If there are not any finalised awards, terminated awards or SOAs in any of the previous award periods prior to the IVA date

  • update the ‘Debt Recovery’ category of Household Notes with the message OD56 from TCM0166020. Make sure you select the ‘Retained’ checkbox. For how to do this, use TCM1000001
  • take no further action.

If there is more than one finalised award (that is, ‘Final Act’ or a combination of ‘Final Act’, ‘Final Man’, ‘Final As Act’) for the same year in any of the previous award periods, go to .

If there is only one finalised award version or there is an SOA in all the previous award periods prior to the IVA date

Note: It does not matter if there is more than one SOA for each award period.

  • go to .

Step 10

If there is more than one finalised award, the case has been re-finalised. Follow the guidance in TCM0264020.

If you can continue to work the case because the re-finalisation was valid, go to .

If you cannot continue to work the case because the re-finalisation was not valid, go to .

Step 11

If you cannot work the case

  • suspend recovery of the overpayments for all years finalised on or before the IVA date (if this has not already been done). Follow the guidance in TCM0226100
  • delete the existing IVA suspension message from Household Notes if present
  • update the ‘Debt Recovery’ category of Household Notes with the message OD75 from TCM0166020. Make sure you select the ‘Retained’ checkbox. For how to do this, use TCM1000001
  • go to .

Step 12

If you are dealing with a re-finalised award

  • pass details of the customer onto the team dealing with S18 cases, asking them to return the case back to you once their action is complete
  • take no further action.

If you are dealing with a case you cannot remit due to an Electronic Action Request System (EARS)

  • file the ‘IVA worksheet’ in your BF run
  • update Household Notes with the message OD75 from TCM0166020. For how to do this, use TCM1000001
  • refer the case to your TALLO
  • when the case is returned, go to .

Step 13

If you are dealing with a joint claim and the partner has entered into an IVA,

  • use the CAR summary screen to identify any overpayments that are being recovered by CAR
  • put Appeals marker on relevant years to send overpayment back to originating years
  • add HH note ON19 to explain why Appeal marker set
  • BF for one day

Calculate the amount of the outstanding overpayment at the IVA date. For how to do this, use TCM1000200. For an example of how to calculate a cross year recovery overpayment, use TCM0322410.

Remove any Appeal markers set at the end of the process.

If you are dealing with a joint claim and the partner has not entered into an IVA,

  • use the CAR summary screen to identify any overpayments that are being recovered by CAR
  • put Appeal marker on relevant years to send overpayment back to originating years
  • add HH note ON19 to explain why Appeal marker set
  • BF for one day

Calculate the amount of the outstanding overpayment at the IVA date. For how to do this, use TCM1000200. For an example of how to calculate a cross year recovery overpayment, use TCM0322410.

Remove any Appeal markers set at the end of the process.

Note: For any single customers or joint households where both customers are in an IVA, you must also calculate any recoveries made on or after the IVA date in respect of an overpayment arising before the IVA date.

Note: Repeat this action for all awards you have identified prior to the IVA date.

Note: Where the customer has been in more than one household during the period, you must include all the overpayments from joint and single awards that were finalised prior to the IVA date with a separate ‘IVA worksheet’ for each period of any year where the household breakdown occurred.

Note: An amount shown in the ‘Adjustments’ field indicates that an overpayment has already been remitted.

If the overpayment amount is under £100.00,

  • remit the amount. Follow the guidance in TCM0230060, using the remission Class 5B
  • update Household Notes with the message OD85 from TCM0166020. For how to do this, use TCM1000001
  • then go to .

If there is an amount shown in the ‘Adjustments’ field, go to .

If there is not an amount shown in the ‘Adjustments’ field, go to .

Step 14

Make a note of the remission class. For how to do this, use TCM1000196. Check for any Class 16 remissions. For how to do this, use TCM1000027.

Note: Do not take any action on auto remits under £200.00.

If you identified a Household note at because of discharged bankruptcy, go to .

If the remission is Class 2

  • make a note the amount of the remission on the ‘IVA worksheet’
  • go to .

If the remission is Class 5B

  • make a note of the remission date
  • check Household Notes to determine if the remission has been done under Class 5B because Class 2 was not available. For how to do this, use TCM1000067
  • go to .

If the remission is Class 10 or Class 11

  • do not note the amount of the remission on the ‘IVA worksheet’
  • go to .

If the remission is Class 13

  • make a note of the remission date
  • check Household Notes to determine if the remission has been done under Class 13 because Class 5B was not available. For how to do this, use TCM1000067
  • go to .

If the auto remission is Class 16 and over £200.00

  • complete Tax Credits Coding Out Referral (Word 32KB)
  • email the form to ‘DL-Coding Out Stencils’
  • BF the case until the Class 16 remission has been cancelled
  • make a note of the amount of the remission on the ‘IVA worksheet’
  • go to .

If the remission is Class 4, go to .

Step 15

Check for a deceased partner. For how to do this, use TCM1000128.

If there is a deceased partner, go to .

If there is not a deceased partner, go to .

Step 16

Check the partner’s date of death. For how to do this, use TCM1000186.

If there has been a household breakdown before the partner’s date of death,

  • cancel the Class 4 remission. For how to do this, use TCM0230060
  • remit 50% of the amount as Class 2. For how to do this use TCM0230060
  • make a note of the amount on the ‘IVA worksheet’
  • make a remit for the remaining 50% of the amount as Class 4 remission. For how to do this, use TCM0230060
  • go to .

If there was no household breakdown before the partner’s date of death,

  • cancel the Class 4 remission. For how to do this, use TCM0230060
  • make a remit for the amount under Class 2. For how to do this, use TCM0230060
  • make a note of the amount on the ‘IVA worksheet’
  • go to .

Step 17

If the amount of Class 4 remit is £100.00 or under,

  • cancel the class 4 remit. For how to do this, use TCM0230060
  • make a remission for the same amount under Class 5B. For how to do this, use TCM0230060
  • go to .

If the amount of Class 4 remit is over £100.00, go to .

Step 18

If you are dealing with a single claim or there is a partner with an IVA,

  • cancel the Class 4 remission. For how to do this, use TCM0230060
  • make a remit for the amount under Class 2 or Class 5B. For how to do this, use TCM0230060
  • make a note of the amount on the ‘IVA worksheet’
  • go to .

If you are dealing with a joint claim but the partner does not have an IVA

  • issue a TC880b from the SEES database
  • update household notes with the note OE35 from TCM0166020. For how to do this, use TCM1000001
  • check if overpayment recovery has been suspended. For how to do this, use TCM1000084

If recovery has been suspended

  • remove the suspension marker. For how to do this, use TCM1000336
  • take no further action.

Step 19

Check if the remission was because of ‘discharged bankruptcy.’ For how to do this, use TCM1000067.

Note: In joint awards, if only one partner is declared bankrupt, liability to the full outstanding overpayment falls to the other partner. In joint household breakdown cases each party will be liable to 50 per cent of the outstanding debt. In these cases, where one or both parties becomes bankrupt their share of the overpayment is considered non recoverable once they are discharged from bankruptcy. Further information is available in the following guidance, TCM0224040.

Note: If the customer has previously had an overpayment remitted as a result of being discharged from bankruptcy they no longer have any liability to repay the overpayment back. For this reason any overpayment remitted because of bankruptcy should not be included in the outstanding overpayment amount.

If the remission was not due to bankruptcy, go to .

If there has been a household breakdown and the customer with the ‘IVA’ has been discharged from bankruptcy

  • note the amount of the remission on the ‘IVA worksheet’
  • go to .

If it is a joint award and only one customer has been discharged from bankruptcy

  • note the amount of the remission on the ‘IVA worksheet’
  • go to .

If there has been a household breakdown and the ex partner has been discharged from bankruptcy

  • do not note the amount of the remission on the ‘IVA worksheet’
  • go to .

If the claim is a single household claim and they have been discharged from bankruptcy

  • do not note the amount of the remission on the ‘IVA worksheet’
  • go to .

Step 20

If the remission was done under Class 5B because Class 2 was unavailable

  • note the amount of the remission on the ‘IVA worksheet’
  • go to .

If the remission was done under Class 5B because there was official error

  • do not note the amount of the remission on the ‘IVA worksheet’
  • go to .

If the remission was done under Class 13 because Class 5B was unavailable

  • do not note the amount of the remission on the ‘IVA worksheet’
  • go to .

If the remission was done under Class 13 for any other reason

  • make a note of the remission amount
  • contact VAS and give them the details of the date and amount of the Class 13 remission
  • do not note the amount of the remission on the ‘IVA worksheet’

Note: In these exceptional circumstances, VAS will tell you if any amount is to be included in the IVA.

  • go to .

Step 21

If you did not find a bankruptcy message at , go to .

If the award period ended because of a joint household breakdown and the Household Note confirms the ex partner has been discharged from bankruptcy

  • add the outstanding overpayment figure you noted at and any remission figure you noted at to
  • you do not need to make a further calculation. The customer is responsible for the full outstanding overpayment

For example: the outstanding overpayment for the tax year 2009-2010 is £500.00. There is a remission of £500.00 showing on the system because the ex partner has been discharged from bankruptcy. As the remission amount is 50% the former partner is not liable to pay back any of the outstanding overpayment. The full amount of the outstanding overpayment is the amount to remit and include in the ‘IVA’ as an overpayment.

  • go to .

If the award period ended because of a joint household breakdown and the customer with the IVA has previously been discharged from bankruptcy

  • add the outstanding overpayment figure you noted at and any remission figure you noted at to
  • calculate 50% of the total using the Insolvency calculator (Excel 22KB)
  • deduct the remission figure you noted at .

If the claim is a single household claim and the customer has previously been discharged from bankruptcy

  • add the outstanding overpayment figure you noted at and any remission figure you noted at to
  • deduct the remission figure you noted at
  • go to .

For example: the outstanding overpayment for the tax year 2009-2010 is £1000.00. 50 per cent of the outstanding overpayment is £500.00 (amount (a)). There is a remission of £500.00 (amount (b)) as the customer has been discharged from bankruptcy. This means there is no amount to remit or include in the ‘IVA’ for the customer with the ‘IVA’.

Note: Ifthere is not a remission figure to include calculate 50% of the outstanding overpayment only.

Step 22

If you found a TTP message for both customers at , go to .

If you found a TTP message for only one customer at , go to .

If you did not find a TTP message or a household breakdown at , go to .

If you did not find a TTP message or a bankruptcy message at , but the award ended because of a household breakdown

  • add the outstanding overpayment figure you noted at and any remission figure you noted at to
  • calculate 50% of the total using the Insolvency calculator (Excel 22KB)

Note: If there is not a remission figure to include calculate 50 per cent of the outstanding overpayment only.

  • go to .

Step 23

Check whether the payments in tally with the TTP agreement you noted at . For how to do this, use TCM1000511.

If you can tell how much has been paid in by the customer with the IVA, go to .

If you cannot tell how much has been paid in by the customer with the IVA

  • contact DMB (This content has been withheld because of exemptions in the Freedom of Information Act 2000) and ask them to confirm how much has been paid in by the customer with the IVA
  • make a separate note of the amounts paid in by both customer

then

  • go to .

Step 24

If you have previously calculated the outstanding overpayment at  to , go to .

If you have not already calculated the outstanding overpayment

  • calculate 50 per cent of the amount of the outstanding overpayment before the TTP was put in place
  • using the Insolvency calculator (Excel 22KB). For how to do this use, TCM1000200
  • go to .

Step 25

If the customer with the TTP is also the customer with the IVA, go to .

If both customers have a TTP but you have worked out how much has been paid in by the customer with the IVA, go to .

If the customer with the TTP is not the customer with the IVA, go to .

Step 26

If the amount the customer has paid in under the TTP (amount (a)) is less than the figure you calculated at or (amount (b))

  • subtract amount (a) from amount (b). The remaining figure is the amount you will need to remit and include in the IVA as an overpayment for that award period

For example: the outstanding overpayment before the TTP is £1,000.00. The customer has paid in £200.00 under the TTP (amount (a)). The customers liability towards the overpayment is £500.00 (amount (b)). Subtract amount (a) from amount (b) leaving £300.00 to remit.

  • if there is an outstanding overpayment which you have calculated falls to the former partner to repay, complete the joint and several liability form for DMB to tell them that the customer’s former partner is responsible for the balance of the overpayment. Email the form to ‘DL-Liverpool DTO Joint and Several referrals’
  • go to .

If the amount the customer has paid in under the TTP (amount (a)) is equal to, or greater than, the figure you calculated at  (amount (b)), go to .

Step 27

There is no amount to remit or include in the IVA as an overpayment for that award period

If there is still an outstanding overpayment to be recovered

  • complete the joint and several liability form for DMB to tell them that the customer’s former partner is responsible for the balance of the overpayment

For example: the outstanding overpayment before the TTP is £1,000.00.The customer has paid in £600.00 under the TTP (amount (a)). The customers liability to the outstanding overpayment is £500.00 (amount (b)). As amount (a) is greater than amount (b), the former partner is responsible for the balance of £400.00.

  • go to .

If there is not an outstanding overpayment to be recovered because the customer has already paid back the full amount, go to .

Step 28

If the amount the customer (former partner) has paid in under the TTP (amount (a)) is less than the figure you calculated at  (amount (b))

  • the amount you calculated at (amount (b)) is the amount you need to remit and include in the IVA as an overpayment for that award period

For example: the outstanding overpayment before the TTP is £1,000.00. The former partner has paid in £200.00 under the TTP (amount (a)). The customers liability to the overpayment has been calculated as 50% and is £500.00 (amount (b)). Remit £500.00 leaving £300.00 to recover from the former partner under the TTP.

  • complete the joint and several liability form for DMB to tell them that the customer’s former partner is responsible for the balance of the overpayment, that is 50 per cent of the overpayment less the amount that the former partner has already paid in
  • go to .

If the amount the customer (former partner) has paid in (amount (a)) is greater than or equal to the figure you calculated at  (amount (b)), go to .

Step 29

If there is still an outstanding overpayment to recover

  • the outstanding overpayment is the amount to remit and include in the IVA as an overpayment for that award period

For example: the outstanding overpayment before the TTP is £1,000.00.The former partner has paid in £600.00 under the TTP (amount (a)). The former partner was liable for 50 per cent of the overpayment is £500.00 (amount (b)) but has paid in 60 per cent of the overpayment. The outstanding overpayment is only £400.00 (£1,000.00 less £600.00). Remit £400.00 leaving the customer’s account balanced.

  • go to .

If there is not an outstanding overpayment to recover because the former partner has repaid the full amount

  • there is not an amount to remit or include in the IVA as an overpayment for that award period
  • go to .

Step 30

To calculate the total overpayment to be included in the IVA for all award periods finalised or terminated on or before the IVA date, add together the following as appropriate.

Note: Depending on the customer’s individual circumstances some of the bulleted items may not be available to include in the overpayment

If the award period is covered by a TTP

  • any overpayment amounts you calculated at to (as appropriate)

If the award period is not covered by a TTP and the award period ended due to a household breakdown and the customer or ex partner has been discharged from bankruptcy

  • any overpayment amounts you calculated at

If the award period is not covered by a TTP or a joint household breakdown

  • the outstanding overpayment amounts for each award period
  • any recoveries or payments in made on or after the IVA date for both single claims and joint claims where both customers are in the IVA

Note: For joint claims where only one customer is in an IVA, do not add any recoveries or payments in made on or after the IVA date.

  • any manual remission amounts (Class 2 or Class 5b used instead of Class 2) if you noted manual remissions at to

For example: thecustomer took out an IVA in the tax year 2010-2011. He originally claimed tax credits with his partner but they separated on 15-02-2008 and after that he claimed tax credits on his own. The award periods to be included in the IVA are 06-04-2007 to 14-02-2008 (joint claim), 23-02-2008 to 05-04-2008 (single claim) and 06-04-2008 to 05-04-2009 (single claim). The customer took out a TTP for the overpayment in the award period 06-04-2007 to 14-02-2008 and you have calculated that the amount to remit for that period is £250.00. There is no outstanding overpayment in the award period 23-02-2008 to 05-04-2008. There is an outstanding overpayment of £600.00 in the award period 06-04-2008 to 05-04-2009 and £70.00 has been recovered since the IVA date against that overpayment. The total overpayment to include in the IVA is £250.00 plus £600.00 plus £70.00, making a grand total of £920.00.

  • go to .

Step 31

If the claim is a single household claim

  • you do not need to make a further calculation. The total amount you calculated at should be remitted
  • go to .

If the claim is a joint household claim and both customers are listed on the spreadsheet as having an IVA

  • you do not need to make a further calculation. The total amount you calculated at should be remitted
  • go to .

If the claim is a joint household claim and only one customer is listed on the VAS spreadsheet as having an IVA and there is a TTP for that award period or the award period ended because of a household breakdown

  • you do not need to make a further calculation. The total amount you calculated at should be remitted
  • go to .

If the claim is a joint household claim and only one customer is listed on the VAS spreadsheet as having an IVA and there is not a TTP or household breakdown for that award period

  • calculate 50 per cent of the amount you calculated at using the Insolvency calculator (Excel 22KB)

Note: Do not include any amount that VAS has advised you to show on the VAS spreadsheet for a Class 13 remission in your calculation of how much to remit

  • go to .

If the claim is a joint household claim and only one customer is listed on the VAS spreadsheet as having an IVA and there is not a TTP or household breakdown for that award period but one customer has been discharged from bankruptcy

  • you do not need to make a further calculation. The total amount you calculated at should be remitted
  • go to .

Step 32

Note: If it is not possible to use Class 2 to make the remission because it requires an amount greater than the outstanding overpayment to be remitted, use Class 5B.

Note: You must complete the Remissions Database for each overpayment you remit and use remission code IVA & Bankruptcy.

Note: If you need to remit any amounts ‘Recovered from other Awards’ after the IVA date, you should remit in the year the recovery has been made from if possible.

For example: if £200.00 has been recovered from the award for tax year 2010-2011 for an overpayment created in tax year 2007-2008, you should remit £200.00 in tax year 2010-2011.

Note: In Household breakdown cases where either customer has been discharged from bankruptcy they are no longer liable for the debt and a remission under class 2 will show on the NTC system. In these cases, the amount of the original remission will need to be added to the amount you have calculated to be included in the IVA when making the remission on the NTC system.

For example: the outstanding overpayment for the tax year 2010-2011 is £600.00 (amount (a)). The system shows a manual remission under class 2 for £600.00. Household Notes confirm this is due to discharged bankruptcy for the former partner. You have established the IVA amount to be included in the overpayment would be £600.00 (customers 50 per cent liability). You would need to cancel the £600.00 remit (amount (b)). Add together amounts (a) and (b) to obtain the amount of £1200.00 to remit on the system. (£600.00 against discharged bankruptcy and £600.00 towards the customers IVA calculation)

If you have included a class 2 or class 5B where class 2 was not available manual remission amount in the calculation of the overpayment

  • cancel that remission
  • remit the amount as instructed at to above. Follow the guidance in TCM0230060, using remission Class 2
  • go to .

If you have not included a manual remission amount in the calculation of the overpayment

  • remit the amount as instructed at to above. Follow the guidance in TCM0230060, using remission Class 2
  • complete the remission database
  • go to .

If you are unable to make a remission because of an EARS, go back to .

Step 33

If the remission included payments in or recoveries made on or after the IVA date

  • file the IVA worksheet and IVA cross year recovery worksheet in your BF run for 48 hours to wait for the tax credit computer to update

then, when the BF expires

  • go to .

If the remission did not include payments in or recoveries made on or after the IVA date, go to .

Step 34

Check whether the remission has sent a payment to the customer. For how to do this, use TCM1000432

If a payment has been issued

  • send the customer the lines to take (IVA 2)
  • go to .

If a payment has not been issued, go to .

Step 35

If you have identified a finalised award where the final award notice has not been issued

  • pass the customer’s details and the tax year requiring a manual award notice to your manager to arrange the issue of a manual notice
  • go to .

If you have not identified a finalised award where the final award notice has not been issued, go to .

Step 36

If at  you have identified an existing IVA message that the remission has already been worked

  • make a note of what remissions have been made under the IVA

Note: Compare the amounts recorded in Household Notes with the amounts on the VAS spreadsheet to decide the correct amounts previously remitted under the IVA. The amounts on the VAS spreadsheet may include the total tax credit overpayment rather than the percentage remitted.

  • go to .

If at  you have not identified an existing IVA message that the remission has already been worked

  • do not make a remission
  • lift the overpayment recovery suspension if this has been set. Follow the guidance in TCM0224120
  • go to .

Step 37

Check whether any of the tax years included in the IVA remission ended more than six years from today’s date.

For example: if today’s date is 23-03-2011 the only tax year to have ended more than six years ago is 2003-2004.

If any of the tax years included in the IVA remission ended more than six years from today’s date

  • check the date the customer was told about that overpayment, that is the Final Award Notice (FAN) or SOA date. For how to do this, use TCM1000195

Note: you will previously have recorded the appropriate date on the IVA worksheet if you are still holding it

  • go to .

If all the tax years included in the IVA remission ended less than six years from today’s date, go to .

Step 38

If the date the customer was told about the overpayment is more than six years from today’s date

  • do not cancel the remission for that tax year
  • go to .

Step 39

If any of the tax years included in the IVA remission ended less than six years ago, go to .

If all the tax years included in the IVA remission ended more than six years from today’s date, go to .

Step 40

  • lift the overpayment recovery suspension if this has been set. Follow the guidance in TCM0224120
  • cancel the remissions that were made under the IVA. Follow the guidance in TCM0230060

Note: Take care to cancel remissions only in respect of amounts that were previously included in the IVA. Other remissions may have been made that do not relate to the IVA and they must be left in place.

  • complete the Remissions Database with a zero amount

Note: This will update the Remissions Database that the original remission has been cancelled.

  • go to .

Step 41

Update the ‘Debt Recovery’ category of Household Notes with the following messages, as appropriate, and delete the IVA suspension message that has previously been recorded. Make sure you select the ‘Retained’ checkbox. For how to do this, use TCM1000001.

Note: If you are making a remission for more than one tax year, you will need to enter the appropriate messages for each year.

Note: Include all relevant award periods and overpayment amounts if you have made a remission for more than one tax year.

If you have dealt with a new entry on the VAS spreadsheet

If you have completed a remission

If you have issued a lines to take (IVA 2) to the customer

If you have identified that a manual award notice needs to be issued

If the IVA failed

  • enter the message OE01 from TCM0166020. For how to do this, use TCM1000001
  • update the VAS spreadsheet at column ‘J’ ‘Household Notes updated’
  • go to .

Step 42

If you have reinstated recovery of an overpayment because the IVA has failed

  • file the ‘IVA worksheet’ in your BF run for three months, in case VAS gives you further instructions about the failed IVA
  • update Household Notes to record your action

then, when the BF expires

  • send the ‘IVA worksheet’ to storage. Follow the guidance in TCM0074140.

If you have not reinstated recovery of an overpayment because the IVA has failed, send the ‘IVA worksheets’, the ‘Insolvency calculator’ (if appropriate) and any correspondence to storage. Follow the guidance in TCM0074140.