COM122040 - Repayments / reallocations: non automatic reallocations: surrender COTAX repayment to COTAX
It is important that you prevent the computer from automatically processing an overpayment (Word 35KB) if a company gives notice of surrender of all or part of it under S102 FA 1989 or the extension under Regulation 9 of the CT Instalment Payments Regulation 1998.
Interest
Treat the recipient company as having paid any interest under S87A TMA 1970 that the surrendering company has paid in respect of the surrendered refund (Section 102(4)). The computer cannot calculate this.
You must calculate it
- In accordance with Step 4 of the 'Surrender COTAX Repayment To COTAX' Action Guide (COM122043)
- Enter it in the Related Interest field when you make the reallocation
The computer will then make a payment type posting of this amount against the interest liability of the recipient company.
Section 102/Reg 9 can only apply when all the relevant conditions are met, see subject 'S102 FA 1989/Reg 9 Surrender' in this section. It is important that companies do not gain the interest advantages of Section 102/Reg 9 when they do not meet these conditions. For information about handling requests to set off a potential repayment due to one company against a liability of another company, when Section 102/Reg 9 does not apply, see subject 'Surrender Outside S102 FA 1989' (COM122070).
When the notice relates to an ‘early repayment’, deal with the surrender using Function REWD (Direct Reallocation Within COTAX) in the usual way. For more information see section 'Non Automatic Repayments' (COM125000) in this business area.
Tax-related penalties
Following the reallocation of a S102/Reg 9 Surrender the computer calculates any tax-related (Word 30KB) penalty payable by the recipient of the surrender automatically, taking account of the restriction in S102(6) FA 1989.
Accidental repayments after a surrender notice is received
A company may have received a repayment despite a valid notice given under S102 FA 1989/Reg 9. (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
For a list of functions to use in particular situations, see COM122041.
For legislation applying to this subject, see COM122042.
