Where a PAYE or CODA overpayment is to be set-off against an SA
liability, function CREATE FREESTANDING CREDIT will be used to
enter a credit on the SA record. More detailed advice on creating a
freestanding credit is provided in subject ‘Freestanding
Credits’ (
SAM110080).
The effective date of payment (EDP) attaching to the set-off
will normally be the later of
And
Detailed guidance about set-offs and ‘stand alone’
claims can be found in section ‘Claims Made Outside A
Return’ (
SAM114000 onwards).
See subject 'Effective Dates of Payment' (
SAM110070) for information on EDP's.
Set-off from SA to a non-SA liability (excluding Class 2
liabilities)
Where the taxpayer has requested that all or part of an SA
overpayment is to be set against a non-SA liability the set-off
should be made through OAS.
The EDP attaching to a set-off will normally be the date the
overpayment is established. (The established date is the date the
relevant information became available in order to make the set
off.)
However, where the overpayment arises from a captured
return, the EDP of the balancing charge credit (BCC), will
automatically be allocated as the filing date of the return, that
is 31 January following the end of the tax year.
As a concession the EDP should be amended where appropriate,
to the date the return was received (logged) if this is earlier
than the filing date.
Note: Repayment supplement (RPS) does not arise
unless the set off is made after the 31 January following the end
of the tax year in which the credit for set off originates.
Set-off from SA to a Class 2 NIC liability
Where an entry has been made in function MAINTAIN SA NOTES
stating that a Class 2 NIC liability is outstanding, the ‘No
repayment’ signal should have been set on the record. In
these cases where an overpayment arises on SA, this can be set-off
against the Class 2 NIC debt.
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
To make the set-off, the appropriate amount of the SA
overpayment to be set against the Class 2 NIC debt should be
transferred to OAS and a form SA331 (to be completed and printed
from SEES) should be completed giving disposal instructions to the
appropriate Banking Operations office.
If the taxpayer subsequently objects to the set-off and
requests a different set-off or repayment, then a revised set-off
or repayment must be made in accordance with the taxpayer’s
request. The taxpayer should be advised that the Recovery Office
will continue to actively pursue the Class 2 NIC debt until paid,
in which case they may incur recovery costs.
In these cases the National Insurance office should be
contacted to request the return of the set-off to the SA record.
Set-off within SA to an earlier tax year
Where a credit is set-off automatically against an earlier
SA liability the EDP attached to the set-off may require amending.
The EDP attaching to a set-off will normally be the date the
overpayment is established. (The established date is the date the
relevant information became available in order to make the set
off.)
However, where the overpayment arises from a captured
return, the EDP of the balancing charge credit (BCC), will
automatically be allocated as the filing date of the return, that
is 31 January following the end of the tax year.
On this basis when a BCC is set off against an earlier SA
liability, it generates an interest charge and surcharge calculated
to an EDP of the filing date of the return. This is irrespective of
whether the return on which the BCC is shown was received prior to
the filing date or not.
In these cases, as a concession the EDP of the BCC should be
amended to the date the return was received (logged) if this is
earlier than the filing date. This applies to all BCC's
irrespective of the income source from which the overpayment
originates.
Note: RPS does not arise unless the set off is
made after the 31 January following the end of the year in which
the credit for set off originates.
To amend the EDP you have to transfer the credit to OAS and
then transfer it back amending the EDP in the process.
