DMBM210130 - Payment allocation, overpayments and repayments: setting off repayments against debts across all duties
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S130 FA2008 and S178 FA2016 give HMRC the power to set-off amounts that are due to be repaid to a person against debts owed to HMRC by that person, including contract settlements. »Ê¹ÚÌåÓýapp power to set-off applies in England, Wales, Northern Ireland and Scotland. It enables HMRC to operate UK-wide across the whole range of debts administered by them with the exception of Tax Credit payments, Child Benefit payments, and Guardians Allowance.
»Ê¹ÚÌåÓýapp power is limited in insolvency by S131 FA2008, which prevents repayments for periods after a person’s insolvency being used to satisfy debts from before their insolvency (unless the repayment also related to the earlier period).
For further information see DMBM700000.