COM120040 - Repayments / reallocations: overpayments: automatic process: automatic calculation of RPI - reallocations

When an overpayment (Word 35KB) arises and is to be reallocated and all the following apply

  • Certain conditions (Word 40KB) exist on the overpaid AP
  • There is outstanding (Word27KB) liability on one or more other APs
  • No conditions exist on the COTAX record to prevent an automatic reallocation being made. For more information see section 'Inhibit Automatic Process' in this business area)
The computer will
  • Calculate any repayment interest (Word 80KB) (RPI) due to the date of the reallocation
  • Make the reallocation automatically
  • Issue a letter to the company explaining the situation. For more information see subject 'Repayment & Reallocation Automatic Output' (COM120050)

COTAX will automatically calculate if any RPI is due and determine the EDP (Word 41KB) to apply to reallocation on the receiving AP by

  • Comparing the normal due date (Word 49KB) of the overpaid AP with the normal due date of the receiving AP
And

The following table provides some examples


Situation

Result

When the normal due date of the receiving AP is the same or earlier than the normal due date of the overpaid AP

The computer will add no RPI

The EDP of the reallocation posting on the receiving AP will be the same as the EDP of the original posting on the overpaid AP

When the normal due date of the receiving AP is later than that of the overpaid AP, but earlier than the date of reallocation

For a payment with an EDP earlier than the normal due date of the receiving AP

  • RPI will be calculated up to the normal due date of the receiving AP
  • The EDP of the reallocation posting on the receiving AP will be the normal due date of the receiving AP

For a payment made on or after the normal due date of the receiving AP
  • No RPI will be added
  • The EDP of the reallocation posting on the receiving AP will be the same as the EDP of the original posting on the overpaid AP

When the normal due date of the receiving AP is later than that of the overpaid AP, and later than the date of reallocation

RPI will be added to the date of the reallocation

The EDP of the reallocation on the receiving AP will be the date of the reallocation

Notes: 

1.

When repayment interest is reallocated the EDP of the posting on the receiving AP will always be the date of the reallocation
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)

For legislation applying to this subject, see COM120021.

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