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Offset self assessment overpayment for vat paye

Offset self assessment overpayment for vat paye

I have just had a cif investigation which has lasted 4 years and the outcome relates to - 

a shortfall of vat and paye, but an overpayment of self assessment returns.

My questions is, given there was an overpayment of sa, greater than any liabilities of vat and paye,

can HMRC enforce interest charges against paye and vat, given they were over paid for self assessment.

Interest charges are in excess of £4000. Is it reasonable to go back to them... accept the findings of their investigation, ie vat and paye shortfall and overpayment of self assessment, but not accept interest owing on this period due to the self assessment overpayment. But accept any penalties for the period.

That is, now at the end of the investigation. The overpayment of self assessment is greater than any liability so they will owe me money, that is if the four year cif had never taken place they and I would have been better off.


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09th Jan 2012 11:54

what you are suggesting

is offset.  In normal business life the answer would be yes.  But for HMRC I dont know.

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09th Jan 2012 11:55




"Is it reasonable to go back...."


of course but the automatons will bleat that there is no connection.

there is no point talking, just write with your summary and proposals,

but the SA over-payments will be repaid with interest, funnily enuff looooads less than what they want to charge you.


You are asking for an offset account with HMRCy, similar to my mortgage.



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09th Jan 2012 12:20

Try it on but expect rejection

They will offset self-assessment underpayments in one year if there have been self-assessment overpayments in previous years, so that there is not an interest charge on the one hand and a far lower repayment supplement on the other. 

But you are talking about three different areas of tax and even if there is a strong direct connection between the PAYE underpayment and the SA overpayment, I doubt you'll convince them - I fear you certainly won't as regards the VAT. 

However, it's always worth trying - good luck!

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09th Jan 2012 12:29

As the money owed and due is with the

the same body you may win at Tribunal following the recent comments by a Tribunal Judge about fairness.

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09th Jan 2012 13:06

This might help


I don't think you have much of a chance, but like the other commentators I believe you have a good moral argument. The text below might help - it a case where HMRC succeeded in setting an overpayment of VAT against PAYE a company owed, so, what's sauce for the goose ought to be sauce for the ganda.

Recent case. In March 2008 a VAT and Duties Tribunal ordered HMRC to pay £30,500 in costs to Xicom Systems Ltd after it won its case against the Taxman. However, an earlier county court judgment had been made in favour of HMRC and against Xicom for the sum of £104,654, relating to PAYE income tax and NI contributions owed to the Taxman.

Further appeal. HMRC wanted to set the money it owed the company against the PAYE the company owed it. The company appealed but the court agreed that HMRC were entitled to make the set-off in this case, but it did warn that it shouldn't assume this would always be allowed in future.

Quoted from Tips and Advice Tax newsletter.



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09th Jan 2012 17:53


Your CIF investigation is intended to cover all direct and indirect taxes. It works on the "offer in settlement" basis and you can make an offer which includes Income Tax, VAT, NIC and Corporation Tax. You will need to make sure your penalty loading on the culpable areas is sufficient but the overpayments made elsewhere should be available to reduce the interest charges.

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