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Chapter SG66350

Document Cited authorities 3 Cited in Related
Vincent
Published date10 April 2016
Record NumberSG66350
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

Under section 130 of the Finance Act 2008 (s130) HMRC can set-off amounts that are due to be repaid to a person (credits) against debts (debits) owed to HMRC by that person.

Set-off can only occur where the credit is owed to, and the debit is owed by, the same person. This means that where an officer of a company provides a PAYE/NICs security it is not possible to set-off any part of that security against the company’s other debts to HMRC.

S130 set-off does not apply where security is provided by a performance bond.

Set-off can only take place where the person’s debt is not disputed, or where the time for them to appeal has passed. The only debt to HMRC that cannot be set-off is costs.

Where security becomes repayable but the person then becomes insolvent, see SG66400.

You can make the set-off without the person’s permission but you must write to them, using Set off notification letter 23a, to warn them about what you are going to do. The letter gives the person 30 days to object to your action. They do not have a right of appeal or review about your decision to set-off a credit against a debit.

If the person asks you to allocate security to a different head of debt, then you might agree their request. You can also refuse the person’s request provided your decision is fair and reasonable, and takes into account all of the circumstances of the case.

If the person objects to the set-off you still have discretion to proceed with the set-off...

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