COM120010 - Repayments / reallocations: overpayments: automatic process: automatic repayment

General

For most overpayments arising on the COTAX record, the computer automatically handles repayments for

• CT Pay and File APs of

• • CT
  • Interest on tax paid late
  • Penalties

• CTSA APs of

• • CT
  • Interest on tax paid late
  • Penalties
  • Credit Interest (Word 34KB) 

• • In Quarterly Instalment Payment (Word 42KB) cases
    

• • Debit interest (Word 31KB) 

Automatic repayments are those that

• The computer identifies and calculates

• An operator creates using an online function

If the company have asked for either the

• • Inhibit Small Repayment (Word 34KB) standard value of £20 or less to apply

• • Or
    

• • Specified a different limit

COTAX will not automatically repay such an amount but instead will look for any outstanding liabilities and reallocate the repayment there. If there are no outstanding liabilities then COTAX will reallocate it to a future liability.

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Method of repayment

Automatic repayments are made

• Wherever possible to the recipient's bank or building society account, using BACS (Bankers' Automated Clearing Service)

• By payable order

The computer selects payment type postings (Word 29KB) up to the value of the overpayment to repay, strictly in effective date of payment (EDP (Word 41KB)) order starting with the most recent.

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Payee

The computer makes all automatic repayments, for whatever AP by reference to the ‘Overpayments and repayment claims’ section of the most recent return captured, as follows

• If you capture bank or building society account details from that return, the computer sends a BACS credit to that account
• If a nominee address but no account details were captured from the return the computer will send a payable order to that nominee address

In all other cases, the computer will send a payable order to the company's Registered Office except when

• The registered office is not in the UK. The computer sends the payable order to the company's UK agent
• A trustee is acting for the company. The computer sends the payable order to the trustee
• The company is in liquidation. The payable order will be sent to the Liquidator

Note: The computer will not issue a payable order to an address that is RLS.

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BACS

Repayment by BACS is fast, secure and cheap but before it can be used the company must provide the necessary details of its own, or its nominee's, bank or building society account.

When a repayment is made by BACS

• The credit will normally be made to the recipient's account on the third working day after you authorise the repayment
• The computer only records the ‘Date of Issue' when it receives confirmation of a successful credit. This is usually 6 to 10 days after you authorise the repayment.

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Viewing repayment details

You can see details of repayments made, for example the payable order number, repayment interest added and so on, by selecting the relevant repayment posting (REP) in Function VPPD (View Payment and Posting Details).

Notes: 

For a list of functions to use in particular situations, see COM120011.