ECH22550 - Yield Recording: Set-off

An employer may request that an overpayment be set-off against underpayments arising from the review. For example where

• there is a CT overpayment
• there is an overpayment on form P35

Where a set-off is to be made the ECO must

• be certain that the amount is truly available for set-off i.e. that the amount is repayable to the employer,
• take action to ensure that repayment of the set-off amount will not be made at a later date by transferring the amount to an overpayment account pending conclusion of the review and
• ensure that any records that require updating are amended (SA records, CT records, NIRS2)

The ECO should

• claim the full amount before set-off on ECS

Where the repayment would be due to a third party, usually an employee, but authority has been given for it to be set against the employers underpayment the ECO should

• claim the net amount after set-off on ECS.

Advice on arranging set-offs where repayment is due to a third party can be sought from Tax Administration Advice, Newcastle (This text has been withheld because of exemptions in the Freedom of Information Act 2000)