COM110090 - Pursuit: automatic and clerical pursuit: pursuit at the debt management office
An AP for pursuit at the Debt Management Office will normally be presented on IDMS. The Pursuit Status on the referred AP will be as in the following table
| Pursuit status | Circumstances |
| LA-ENF (Word 27KB) | A further amount has become collectible or an overpayment has arisen on a previously cleared AP which was LA-ENF at the time |
| PLA (Word 28KB) | The Permanent Local Action signal is set to 'Y' |
| LA (Word 28KB) | All other cases |
It is important that there is no unnecessary delay in either the preliminary action or in the start of recovery proceedings. The most effective action must be taken at all stages.
Note: As you will not be advised of all changes which may be made to a company's record, it is vital that before taking any local action you thoroughly check the company's record, in particular, the AP you are working.
The remainder of this subject is presented as follows
Amounts suspended
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)
Pursuit before the due date
Automatic pursuit by IDMS
Pursuit by Debt Management Office Tyneside
Pursuit at the business address
Pursuing all outstanding liabilities
Stopping pursuit at the Debt Management Office
Debt management responsibility
Interest
Overpayments and reallocations
Responsibility for debt management
Priority for larger cases
Disposal of papers
Amounts suspended
Where part of a collectible amount on an AP has been suspended, the issue of automatic payment applications continues but the amount payable does not include the suspended amount - this amount is shown separately.
When payment application issue finishes, both the collectible and the suspended amount will be included in the amount referred for local pursuit.
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)
Pursuit before the due date
It is possible for an assessment (Word 29KB) to be raised before the due date (Word 49KB). Automatic pursuit will not begin until this date has been reached. However, difficulties may arise where the case is referred for pursuit at the Debt Management Office immediately.
This would include PLA cases and any case which had previously been LA-ENF. The difficulty is only likely to be noticeable for cases where £100,000 or more is collectible, as these cases will appear on the IDMS Caseworker CT list of £100,000 or more before the company has received the notice of assessment or acknowledgement of self assessment. It is therefore important that part of the thorough check of the company record includes a check of the due date. For more information see subject ‘Outstanding Amount £20,000 Or More’ (COM110100) in this section.
Automatic pursuit by IDMS
In certain cases where there are no existing work items for the same reference the initial recovery process will be automatically determined by IDMS. Selection will take place either on creation of the work item or, where appropriate when it leaves the Debt Management Telephone Centre.
Where IDMS has selected the Automatic Enforcement process it will automatically issue a
- Distraint warning letter for England, Wales and Northern Ireland
- Summary Warrant for Scotland
Every letter will be accompanied by a Statement of Liability (Word 27KB) and both will be printed centrally. They will be sent to the Recovery Address held in IDMS, if available, or alternatively to the Registered Office.
Where the letter is successfully produced an Action History will be recorded in IDMS showing the date of issue, type of letter, address to which it was issued, the total amount due and the interest included in that total amount. To allow time for case preparation the work item will appear on the appropriate work list for review three days after the issue of the warning letter.
Where a letter cannot be produced because of failure within the Interest Calculator the following Action History will be displayed in IDMS
- ‘Warning Letter rejected. Interest Calculator failed’
The rejected work item will be put on the work list of the caseworker responsible for the proposed enforcement action. It will have a next action of ‘Issue Warning Letter’.
A work item will not go into the IDMS Automatic Enforcement process, IDMS will refer if for clerical action by the Debt Management Office where
- There are other work items for the same reference already working at the Debt Management Office
- The insolvency signal is set
- The PLA signal is set
- The Welsh Language signal is set
- Any information codes (Word 61KB) are set
- The amount is £100,000 or more
Pursuit by Debt Management Office Tyneside
Debt Management Office Tyneside has been set up to deal with new CT debts where the case is classed as 'clean'. A 'clean’ case is one where the following apply
- There is only one outstanding work item in IDMS. The case does not involve clerical interest and the clerical interest indicator (Word 32KB) is not set to ‘Y’
- The company is not in Administration Receivership (Word 27KB), Company Voluntary Arrangement (Word 27KB) or Company Liquidation (Word 30KB)
- The company has not been struck-off
- The AP has not been made local action clerically to follow up a query or failure to keep a time to pay arrangement
The purpose of Debt Management Office Tyneside is to trace the business address and telephone number of the company where the information is not already on COTAX. They will update the COTAX communication address with these details so that future pursuit will take place at the correct address.
Debt Management Office Tyneside will take the initial steps in pursuing the outstanding debt in accordance with the REPE (Word 27KB) process for corporation tax. This process will be up to and including the issue of the IDMS 10 distraint warning letter.
Pursuit at the business address
It is important that pursuit takes place at the most suitable address where payment of the outstanding amount is most likely. This will, in the majority of cases be the business address. The COTAX record can hold up to 3 different addresses
- The Registered Office
- A Communication address
- An Agents address
The business address is not always the same as the Registered Office. If this is the case it should be recorded as a communications address using Function ACOM (Amend Communication Address).
Where a business address has not been recorded on COTAX you should always check for a PAYE record.
If there is a PAYE record you should look for a business address and telephone number where recovery prospects may be better. This would be the case where demand notes have been issued to the Registered Office and this is the same address as the Agent. To continue pursuing the debt at that address may not result in payment and enforcement / recovery action may not be appropriate there.
Where there is no PAYE record you should contact the office responsible for the company to obtain the business address and telephone number.
Pursuing all outstanding liabilities
All collectible amounts working locally for the same company at the same time are to be cross referenced and worked together, see IDMS Good Practice Guide (3).
As IDMS will initially not be able to cross reference cases with different reference numbers it will be necessary to check Banking Operations records for PAYE and / or SAFE liability. Additionally there may be other collectible liability which is not yet working LA. The appropriate cross references should then be made using IDMS Function Cross Reference. You should then consider whether linking is appropriate, see IDMS Good Practice Guide (9).
Stopping pursuit at the Debt Management Office
- (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
Further information on making an informal stand over can be found in business area ‘Appeals’, section ‘Handling Appeals and Postponements’, subject ‘Informal Standover in responsible CT Office’ (COM10070).
Debt management responsibility
If you have linked several debts there is a possibility that collection of different Heads of Duty could have been referred to different Debt Management Offices.
Where more than one Debt Management Office is involved you should consider whether it is appropriate to transfer responsibility to the other Debt Management Office for the following reason
- You are aware that the company has a further address in another Debt Management Offices area where recovery prospects are better
Notes:
| 1. | Debt Management Offices should not transfer periods of responsibilities because IDMS only recognises one Debt Management Office (including Enforcement & Insolvency Service) as being responsible for all unpaid liabilities for a Head of Duty for a particular company |
| 2. | Whenever practical, all arrears due from a company which are working locally are transferred at the same time |
| 3. | You must bear in mind the important principle that in England and Wales, where County Court proceedings may be necessary, a defendant must not be summoned to a distant court |
Interest
When communicating with the company or agent you must
- For a Quarterly Instalment Payment (Word 42KB) case where the normal due date of the AP has not been reached calculate the net amount of debit interest and include this amount when asking for payment of the tax
Or
- For all cases where the normal due date of the AP has passed you must always include any accrued late payment interest to date
In addition, you must warn that late payment interest (Word 27KB) continues to accrue daily (after the normal due date for the AP) on unpaid amounts.
Note: Where payment of tax only is made in a case working with you recovery of any interest charge subsequently raised will remain your responsibility.
Overpayments and reallocations
Where an overpayment arises on an AP under pursuit at the Debt Management Office COTAX will automatically deal with the overpayment where the Pursuit Status is LA or PLA. Where the Pursuit Status is LA-ENF no action will be taken and you will need to deal with the overpayment.
Where the office responsible for dealing with the overpayment wants to make a reallocation for a case which has been referred for pursuit at the Debt Management Office, that office will contact the Debt Management Office to discuss the matter.
Responsibility for debt management
Arrears are to be worked according to the total collectible liability of the case. The officer normally responsible for the working and supervision of a case is shown in the following table
| Total liability | Officer to work the case | Officer to review the case |
| Up to £5,000 | 1. Admin Assistant, except for duties in 2 below2. Assistant Officer
Or
|
Officer |
| £5.001 to £9,999 | Admin Assistant | Officer |
| £10,000 to £19,999 | Officer | Higher Officer |
| £20,000 or more | Higher Officer | Senior Officer |
Where the responsibility for working a case is at Officer level or above, routine actions may be delegated provided that
- They are closely supervised to ensure there is no delay in collection
And
- The case remains under the control of the delegating officer
Where the total liability is under £5,000 the Reviewing Officer is to
- Arrange for IDMS to assign the cases to officers with suitable experience and training
- Ensure that the fast streaming procedures in the Assessed Taxes (AT) Manual 7.205 are followed so far as possible
Where the total liability increases the case is passed to the appropriate higher grade.
Priority for larger cases
The Manager in consultation with the Debt Management Group Office is to ensure that
- Cases are correctly selected and presented on IDMS
- A priority post system is operated
Where a case has a total collectible liability of £5,000 the responsible officer is to ensure that prompt action is taken with
- Incoming post
- Approaching the company by letter, telephone or personal call
- And, where there is no satisfactory response
- Recovery locally or reference to Enforcement & Insolvency Service
For cases with a total collectible liability of £20,000 or more see subject ‘Outstanding Amount £20,000 Or More’ (COM110100) in this section.
Disposal of papers
When an AP no longer has a Pursuit Status of LA, LA-ENF or PLA the cleared papers are filed and retained for one year.
For a list of functions to use in particular situations, see COM110091.
For legislation applying to this subject, see COM110092.
