DMBM555530 - Debt and return pursuit: tax credits: interest: action by SAFE Team - identifying the overpayment

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Action by the SAFE Team

Initial action

Where

  • a copy of the closure letter or interest decision letter is not attached to the interest stencil
  • the closure letter does not warn the claimant(s) that the overpayment is interest bearing
  • the warning about interest in the closure letter is inadequate
  • the stencil shows an overpayment but according to NTC View Overpayment there isn’t one or it is suspended or notional
  • where the amount overpaid according to the stencil is more than that shown on NTC View Account and this is not because payments have been received
  • return the interest stencil with the interest stencil return form to the Credit Compliance Order (CCO)

Identifying the overpayment on the stencil

The stencil should state if there

  • is a continuing award (recovery will be from an on-going award)
  • is not a continuing award (direct recovery).

If in doubt, the recovery method can be obtained from NTC View Overpayment.

Direct Recovery overpayments (through IDMS)

New overpayments

Where there is an existing IDMS work item, the new overpayment will automatically link with an existing overpayment(s), unless one of the following applies

  • instalment arrangement
  • enforcement signal set.

If there is no existing work item

  • use NTC function Maintain Overpayment to call off the overpayment from NTC to IDMS (the item will appear on the C/W Tax Credit worklist a day or so later).

For all cases

  • enter a note in IDMS ‘Notes/Assets’ “O/P WTC/CTC is interest bearing. Interest bearing amounts for charging interest are WTC £xx (Due Date dd/mm/yyyy)/ CTC £xx (Due Date dd/mm/yyyy)”
  • create an IDMS interest work item for £0.00 using the following reference formats, as appropriate
  • interest on WTC overpayment: N AANNNNNNA DDMMYY 01X
  • interest on CTC overpayment: N AANNNNNNA DDMMYY 02X

Cross Year Recovery (CYR) overpayments

In CYR cases, the ‘from’ and ‘to’ dates for interest purposes are shown at item 1 of the stencil.

In practice, in most cases, the ‘to’ date will be before the overpayment has been paid.

On receipt of the stencil from CCO proceed as follows

If the due (or ‘to’) date has expired

  • calculate interest and raise an interest charge.

If the due (or ‘to’) date has not expired

  • B/F the case to the date of issue of the revised Award Notice + 30 days (as shown on the stencil).

When raising the interest charge

  • enter a note in ‘Notes/Assets’ that “The interest charge relates to an O/P £xx WTC (Due Date dd/mm/yyyy)/ £xx CTC (Due Date dd/mm/yyyy) arising in [year] that is being recovered by CYR”

CYR changes to direct recovery

If CYR ceases the overpayment will become direct recovery. If this happens

  • continue to calculate interest per the dates specified on the original stencil.