CCLG13250 - Bad Debt Relief on CCL: Payment received where customer has more than one debt
If there were two or more debts with the customer (including debts relating to non-taxable supplies) and the customer makes a payment to the energy supplier, this payment must be allocated to the oldest debt unless the customer specifies which debt the payment should be allocated to. If several debts arise on the same date, the payment should be allocated across all these debts based on the proportion of each debt to the total debt. The rules on attributing payment are set out in Regulation 16 of the CCL (General) Regulations 2001.
16 (3) The payment shall be attributed to the debt that arose earliest and, if not wholly attributable to that debt, to the other debts in the order of the dates on which they arose.
(4) Attribution under paragraph (3) shall not be made to the extent that the payment was allocated to the debt by the recipient (customer) at the time of payment.
(a) the earliest debt and the other debts to which the whole of the payment could be attributed arose on the same day, or
(b) the debts to which the balance of the payment could be attributed in accordance with paragraph (3) arose on the same day, the payment shall be attributed to each remaining debt according to the proportion that the debt in question contributes to the total debt.