Chapter DMBM618560

Published date29 April 2016
Record NumberDMBM618560

Coding out SA debts through PAYE tax codes will have the effect of reducing a customer’s take-home pay and may affect certain means-tested benefits. You should tell customers who tell you they may be affected:

to contact their benefit provider for advice

that they can get more information on income-related benefits on the under Benefits.

If the taxpayer contacts you by letter or phone objecting to coding out, advise that we do not need their authority to code out the debt.

If the amount is remitted on SA, you should normally only agree to stop the coding out process if the taxpayer agrees to pay immediately by debit or credit card.

If the amount has not yet been remitted on SA, you should:

  • establish if the taxpayer has a PAYE source of income, for example is employed or receives a UK based pension. Staff working in DTO campaign offices who have access to NPS can view NPS to establish details of the taxpayer’s employment and normally
  • agree to stop the coding out process only if the taxpayer either:

    • does not have a PAYE source
    • agrees to pay immediately by debit or credit card.

Whether the debt are already remitted or not, if the taxpayer demonstrates that he or she is genuinely unable to pay in full, and that collecting the debt over 12 months through their tax code will cause them hardship:

  • negotiate an acceptable time to pay arrangement
  • set up a direct debit.

When negotiating time to pay:

  • check that the taxpayer did not default on previous TTP arrangements
  • ensure that the taxpayer is serious about their obligations...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT