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HMRC internal manual

Tax Credits Manual

Specialist areas: early targeted action: penalty debt recovery

Checklist

Before you follow this, make sure

  • you have the correct user roles to follow this guidance.
  • you have access to the Penalty Debt CAF
  • you have access to the Direct Debit System (NDDS)
  • you have access to the Telephone Payment Service (TPS)
  • you have access to NTC AMB
  • the ‘Debt Recording Spreadsheet’ held in the CAF.

Background

Early Targeted Action (ETA) Debt recovery is a process that has been introduced to contact the customer nearer the time the debt has been created to discuss repayment. This process can be applied to any direct recovery debt where there is no ongoing award available to recover the debt or to penalty charges. The ETA process involves an outbound call to the customer to secure payment and uses Debt Management and Banking systems to record payments.

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

Access the ‘Debt Recording Spreadsheet’ located in the CAF.

Note: For any issues with accesses please contact your manager.

  • make a note of the SAFE Penalty Charge reference of the case that you are working
  • keep the ‘Debt Recording Spreadsheet’ open
  • complete ‘Debt Recording Spreadsheet’ as you work through this guidance
  • go to Step 2.

Step 2

Check that you are working the case within 14 days from when the case was entered on the spreadsheet.

Note: On day 15 reminders are issued by SAFE

If the case you are working is within 14 days from when it was entered on the spreadsheet, go to Step 3.

If the case you are working is not within 14 days from when it was entered on the spreadsheet, take no further action.

Step 3

Check SAFE system to confirm if a penalty is outstanding, also check household notes under ‘Debt’ category to confirm if payment in full or ‘Time to Pay’ (TTP) has been set up for the debt as this payment may not yet be shown on the SAFE system.

If a TTP arrangement has been set up

  • update ‘Debt Recording Spreadsheet’ using the option ‘Payment/TTP already made’ from the ‘Outcome of the call’ dropdown menu
  • update Household Notes with the message OT14 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If payment in full or a TTP arrangement has not been set up, go to Step 4.

Step 4

Phone the customer and confirm their identity

Note: If you have not been able to contact the customer on the first attempt, make two further attempts at different times and on different days.

If you are able to contact the customer by phone

  • at the start of the call ask for the customer by title and surname
  • once you are happy that you are speaking to the correct person, tell the customer
    • your full name
    • that you are calling from Her Majesty’s Revenue and Customs
    • that you are ringing in relation to their Penalty Charge
    • that in order to proceed with the call you need to ask some security questions. For how to do this, use TCM0094120.
    • go to Step 5.

If you are unable to contact the customer by phone on the first call attempt

  • update Household Notes with the message OT20 from TCM0166040. For how to do this, use TCM1000001
    Note: Household note OT20 should be entered as a temporary note to raise awareness of the Penalty Recovery process.

If you are unable to contact the customer after two further attempts have been made

  • update the ‘Debt Recording Spreadsheet’ under the appropriate option from the ‘Outcome of call’ dropdown menu
  • remove the Household note OT20
  • update Household Notes with the message OT01 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note OT01 should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

Step 5

Verify the customer’s identity

If you have verified the customer’s identity and they are happy to proceed with the call, go to Step 7.

If you have verified the customer’s identity and they are not happy to proceed with the call, go to Step 6.

If you have not verified the customer’s identity

  • terminate the call with the customer
  • update the ‘Debt Recording Spreadsheet’ under the appropriate option from the ‘Outcome of call’ dropdown menu
  • update Household Notes with the message OT02 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

Step 6

Establish the reason why the customer does not want to proceed with the call

If you have called the customer at an inconvenient time

  • ask the customer what time would be convenient to call them
  • advise the customer that you will call back at the agreed time (within working hours)
  • BF the case for the agreed date and time
    then
  • at the expiry of the BF date and time return to this guidance at Step 1.

If the customer refuses to engage with you

  • tell the customer that Debt Management and Banking (DMB) will write to them in due course
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • complete the ‘Comments’ column with the reason why the customer refused to engage
  • update Household Notes with the message OT03 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If the customer does not believe that you are ringing from HMRC

  • tell the customer to call on 0300 2003854 advising that opening hours are 8am to 8pm Monday to Friday, and 8am to 4pm on Saturday
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT04 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If the customer is unwilling to discuss the payment as they intend to appeal

  • tell the customer that interest will continue to accrue on the penalty charge during the review of the appeal and that the charge remains due and payable until the appeal is submitted in writing to the penalty officer who raised the charge
  • update Household Notes with the message OT16 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If the customer advises you that they have not received the Penalty Charge

  • tell the customer that the penalty notice will be re-issued
  • update Household Notes with the message OT19 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

Step 7

Discuss repayment options with the customer and tell them that interest is chargeable on late payments.

If the customer agrees to discuss repayment options, go to Step 9.

If the customer agrees to discuss repayment options but cannot pay because they are unemployed and have no savings or assets, go to Step 19.

If the customer agrees to discuss repayment options but cannot pay because they are on sickness or incapacity related benefits, go to Step 8.

If the customer will not agree to discuss repayment options

  • tell the customer that Debt Management and Banking (DMB) will contact them in due course
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT03 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If the customer advises that payments are currently being made against the NTC debt

  • tell the customer
    • that payments should be prioritised against the interest baring penalty charge
    • to phone on 0300 2003854 to arrange for further payments to be prioritised against the penalty charge
    • the opening hours are 8am to 8pm Monday to Friday, and 8am to 4pm on Saturday
  • update Household Notes with the message OT18 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

Step 8

Check if the customer can make a payment at the present time

If the customer can make a payment, go to Step 9.

If the customer cannot make a payment because they are on sickness or incapacity related benefits

  • tell the customer
    • DMB will contact them at a future date and they should respond to that correspondence
    • to phone on 0300 2003854 if their condition improves
    • the opening hours are 8am to 8pm Monday to Friday, and 8am to 4pm on Saturday
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT06 or OT07 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

Step 9

Ask the customer how much they can repay

If the customer can repay the full debt immediately, go to Step 12.

If the customer can repay the full debt as a one off payment at a later date, go to Step 12.

If the customer can repay the full debt within three years, go to Step 12.

If the customer can repay the full debt but requires between three and ten years to do so, go to Step 10.

If the customer can pay the full debt but will take longer than ten years to do so, go to Step 11.

If the customer can only make a one-off part payment at the current time, go to Step 12.

Step 10

Follow the Tax Credit Negotiating Framework to negotiate an amount that the customer can afford in order to repay the debt in full

Note: TTP arrangement over three years should not be set up for an amount of less than £10 per month or £2 per week

If you have agreed a repayment schedule with the customer, go to Step 12.

If you have not been able to agree a repayment schedule with the customer

  • tell the customer DMB will contact them at a future date
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT15 from TCM0166040. For how to do this, use TCM1000001.
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

Step 11

Complete the Income and Expenditure (I&E) form if the customer is requesting an arrangement over ten years. You will then be able to make an informed decision based on the information obtained from the customer

Note: TTP arrangement over three years should not be set up for an amount of less than £10 per month or £2 per week

If an arrangement is accepted

  • file the electronic I&E form in the I&E sub folder set up in the CAF
  • go to Step 12.

If an arrangement is not accepted

  • tell the customer DMB will contact them at a future date
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT08 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

Step 12

Ask the customer if they will supply their bank or card details by phone

If the customer will supply their bank or card details, go to Step 14.

If the customer will not supply their bank or card details, go to Step 13.

Step 13

Ask the customer if they would like us to send them a Direct Debit form or Payslip to take to a bank or building society

If the customer would like a Direct Debit form sending to them

  • tell the customer to call on 0300 2003854 advising them that the opening hours are 8am to 8pm Monday to Friday, and 8am to 4pm on Saturday
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT13 from TCM0166040. For how to do this, use TCM1000001.
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If the customer would like a Payslip to take to a bank or building society

  • tell the customer to call on 0300 2003854 advising them that the opening hours are 8am to 8pm Monday to Friday, and 8am to 4pm on Saturday
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT12 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

Step 14

In Step 9 you established the customer’s ability to repay their debt

If the customer can repay the full debt immediately, go to Step 15.

If the customer can repay the full debt as a one off payment at a later date, go to Step 16.

If the customer can repay the full debt within three years, go to Step 16.

If the customer can repay the full debt but requires between three and ten years to do so, go to Step 16.

If the customer can repay the full debt but requires longer than ten years to do so, go to Step 16.

If the customer can only make a one-off part payment immediately, go to Step 20.

Step 15

Access the Telephone Payment Service (TPS) to arrange a one off payment to repay the debt in full, for how to do this use Telephone Payment Service Helpcard.

If the payment has been authorised

  • end call with the customer
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT09 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If the payment has been declined, go to Step 18.

Step 16

Access the National Direct Debit System (NDDS) to set up a Time to Pay (TTP), for how to do this use TCM1000551

Note: TTP arrangements over 12 months and within three years should not be set up for amounts of less than £4.99 per month or £0.99 per week.

Note: TTP arrangement over three years should not be set up for an amount of less than £10 per month or £2 per week

Once you have set up the TTP

  • ask customer if they would like you to read the Direct Debit Guarantee
  • go to Step 17.

Step 17

If the customer would like you to read the Direct Debit Guarantee

  • read the Direct Debit Guarantee to the customer
  • tell them they will also receive confirmation of their payments and the Direct Debit Guarantee in writing
  • end call with the customer
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT11 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If the customer does not want you to read the Direct Debit Guarantee

  • tell them they will also receive confirmation of their payments and the Direct Debit Guarantee in writing
  • end call with the customer
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT11 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

Step 18

Ask the customer if they have another card that they could use to make payment

If the customer has another card and payment has been authorised

  • end call with the customer
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT09 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If the customer does not have another card

  • tell the customer DMB will contact them at a future date
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT10 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If the customer has another card but payment has been declined

  • tell the customer DMB will contact them at a future date
  • update the ‘Debt Recording Spreadsheet’ using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT10 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

Step 19

Ask the customer if they are able to make a payment at the present time

If the customer is unable to make a payment

  • tell the customer
    • DMB will contact them at a future date
    • they will need to tell DMB their current circumstances when they contact them
    • if their circumstances improve before DMB contact them they should phone on 0300 2003854
    • the opening hours are 8am to 8pm Monday to Friday, and 8am to 4pm on Saturday
  • end the call with the customer
  • update the ‘Debt Recording Spreadsheet’ under the appropriate heading using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT05 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If the customer can make a payment, go back to Step 9.

Step 20

Access the Telephone Payment Service (TPS) to arrange a one-off payment to repay the debt in part. For how to do this, follow Telephone Payment Service Helpcard.

If payment has been authorised

  • tell the customer
    • that interest will continue to accrue on the penalty charge balance
    • DMB will contact them at a future date
    • if their circumstances improve before DMB contact them they should phone on 0300 2003854
    • the opening hours are 8am to 8pm Monday to Friday, and 8am to 4pm on Saturday
  • update the ‘Debt Recording Spreadsheet’ under the appropriate heading using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT17 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If the payment has been declined, go to Step 21.

Step 21

Ask the customer if they have another card that they could use to make the payment.

If the customer has another card and payment has been authorised

  • tell the customer
    • that interest will continue to accrue on the penalty charge balance
    • DMB will contact them at a future date
    • if their circumstances improve before DMB contact them they should phone on 0300 2003854
    • the opening hours are 8am to 8pm Monday to Friday, and 8am to 4pm on Saturday
  • update the ‘Debt Recording Spreadsheet’ under the appropriate heading using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT17 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If the customer does not have another card

  • tell the customer that
    • DMB will contact them at a future date
    • interest will continue to accrue on the penalty charge
    • if their circumstances improve before DMB contact them they should phone on 0300 2003854
    • the opening hours are 8am to 8pm Monday to Friday, and 8am to 4pm on Saturday
  • update the ‘Debt Recording Spreadsheet’ under the appropriate heading using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT10 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.

If the customer has another card but payment has been declined

  • tell the customer that
    • DMB will contact them at a future date
    • interest will continue to accrue on the penalty charge
    • if their circumstances improve before DMB contact them they should phone on 0300 2003854
    • the opening hours are 8am to 8pm Monday to Friday, and 8am to 4pm on Saturday
  • update the ‘Debt Recording Spreadsheet’ under the appropriate heading using the appropriate option from the ‘Outcome of call’ drop down menu
  • update Household Notes with the message OT10 from TCM0166040. For how to do this, use TCM1000001
    Note: The household note should be ‘Retained’ and recorded under the category ‘Debt Recovery’.
  • take no further action.