COM122096 - Repayments / reallocations: non automatic reallocations: reallocation out of COTAX - banking operations office (Action Guide)

When using Function REAO consider steps 1 - 5 below. The guide is presented as follows


Initial action Steps 1 - 3
Overpayments which cannot be accommodated on the company’s record Step 4
Consideration of Repayment Interest (RPI) Step 5

Initial action

1. Ensure one of the following conditions applies which makes you responsible for dealing with the reallocation
 
  • The overpayment appears on the LOPU (Overpayments Review List) work list
 

Note: Where the overpayment was created as the result of carry-back or S458 CTA 2010 (formerly S419(4) ICTA 1988) relief, ask the responsible CT office to deal with the overpayment
 
 
  • The payment was incorrectly allocated
 
  • The bank notifies you of a returned cheque payment and lodgement adjustment. For more information see section 'Payments Returned by the Bank' (COM91000) in business area ‘Payments’
2. If none of the above conditions apply
 
  • Refer the correspondence or enquiry to the responsible CT office or Debt Management Office as appropriate
3. Use Function VPPD (View Payment and Posting Details) to identify any other liability for the company, or any AP that has passed the normal due date but no charge is on the record
 

Where other liability is found
 
  • Use Function REAW (Direct Reallocation Within COTAX) to reallocate the overpayment
 

Where an AP has no tax charge and the normal due date has passed
 
  • Check that the company agrees the proposed reallocation before proceeding

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Overpayments which cannot be accommodated on the company’s record

4. Use Function REAO (Direct Reallocation Out of COTAX) to transfer the overpayment to OAS (Word 24kb) under one of the following
 
  • Class 1, for amounts above £10 which are to be held for immediate reallocation
 
  • Class 2, for amounts above £10 which are held for later reallocation
 

Note: Reallocations from OAS may be made to other heads of duty
 
  • Class 3, for amounts above £10 for later repayment
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)

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Consideration of Repayment Interest (RPI)

5. If Repayment Interest (Word 81.5kb) (RPI) is payable on tax being reallocated to OAS
 
  • Prepare form AZ600 (See Section L of the AO Manual)
 

Note: Function REAO does not calculate RPI on amounts transferred to OAS. A single entry is created in OAS for the total amount of tax, penalty and interest reallocated from COTAX


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