INS12654 - Accounting issues: Payments/Repayments received after the relevant date
Payments received after the relevant date
When a payment is received after the relevant date, but no corresponding tax due return is received, the payment should be checked to confirm that it has been allocated to the correct trader. Checks should be made to DTR/Electronic Folder for any notes/correspondence relating to the payment. If no information can be found in EF then contact the Insolvency Practitioner to determine if they have submitted the payment. The payment may have been made in error and keeping it would constitute a false preference.
Alternatively, the money could be a misapplied remittance put on the wrong registration and the correct trader could be pursued incorrectly for money he has already paid.
Repayments made after the relevant date
Where a pre-relevant repayment is made after the relevant date, and the payable order is encashed, ask the IP to return the money so that Crown Set Off (CSO) enquiries can be initiated if appropriate. Set off in insolvency is covered by Section 323 of the Insolvency Act 1986 (for bankruptcies), Rule 4.90 (for liquidations) & Rule 2.85 (for administrations) of The Insolvency Rules 1986. Under each of these legislative provisions set off is mandatory. Therefore, the IP must return to us any pre-relevant payment made after the relevant date, for us to fulfil our statutory duty to set off under insolvency legislation.
Further information about Crown Set Off is given at INS12363.
Payable order not encashed
If the pre-relevant payable order has been issued after the relevant date but not encashed, a memo should be sent by fax (fax no 01702 366308) to Repayment Operations Team, 10th Floor N/W, Alexander House, Southend-On-Sea, Essex, SS99 1AA, requesting that the payable order is cancelled and the credit reinstated. Please ensure you provide full details of the payable order (date approved, microfilm number, period it relates to and the amount).
