COM80086 - Interest: how interest is calculated: credit / debit interest: clerical charge (debt management) (Action Guide)

To raise or amend a credit interest (Word 34KB) and debit interest (Word 31KB) charge in the Debt Management Office consider steps 1 - 20 below.

The guide is presented as follows

Preliminary action	Steps 1 - 5
Incorrect EDP used for charging debit / credit interest	Step 6
Supplementary tax on North Sea Oil companies	Steps 7 - 8
Calculation displayed on Function RMIC screen COT107G Dialogue Box showing Credit / Debit Interest Accrual details is correct	Step 9 - 12
Calculation displayed on Function RMIC screen COT107G Dialogue Box showing Credit / Debit Interest Accrual details is incorrect	Steps 13 - 17
AP is overpaid after raising or amending a clerical credit / debit interest charge	Step 18
AP is underpaid after raising or amending a clerical credit / debit interest charge	Steps 19 - 20

Preliminary action

1.	Before you raise or amend a credit / debit interest charge you must
	Have authority to reduce overpaid interest on form AZ63
	Note: You must not raise a credit / debit interest charge clerically unless you have the appropriate authority
2.	Use Function VPPD (View Payment and Posting Details), View AP Summary screen to confirm the
	Company’s self assessment is recorded or a Revenue Determination (Word 29KB) has been made
	AP is subject to Clerical Pursuit (Word 28KB)
	And
	Take screen prints of the postings screens. You will need these later - see step 7
3.	Where the AP is not subject to Clerical Pursuit use Function RAPP (Revise AP Pursuit) to make the AP LA (Word 28KB)
4.	Use Function DAPD (Display AP Details) to check if the Quarterly Instalment Payment (Word 42KB) (QIP) signal is set to ‘Y’
5.	Where the QIP signal is set to ‘Y’ then use Function DINT (Display Interest Computation) to confirm
	The quarterly instalment amounts
	And
	The quarterly instalment due dates

Top of page

Incorrect EDP used for charging debit / credit interest

6.	If the wrong EDP (Word 41KB) has been used to calculate credit / debit interest
	Use Function AEDP (Amend Effective Date of Payment) to amend it
	By amending the EDP COTAX will automatically recalculate the credit / debit interest to the correct date unless the Credit / Debit Interest Indicator (CDII) (Word 29KB) signal is set. Where this signal is set see step 13 below on how to amend the interest charge.

Top of page

Supplementary tax on North Sea Oil companies

7.	Where Function RMIC displays a message indicating that the AP straddles the transitional period for the introduction of the supplementary tax on North Sea Oil on companies select the [S501A] button to view the additional instalment details
8.	Once you have viewed the additional instalment details you will need to return to the previous screen by selecting the [OK] button to perform / correct the interest calculation. See step 9 where the interest accruals are correct and step 13 where the interest accruals are not correct

Top of page

Calculation displayed on Function RMIC screen COT107G Dialogue Box showing Credit / Debit Interest Accrual details is correct

9.	If the details displayed on screen COT107G Dialogue Box (accessed by selecting the Accruals Details button) are correct raise a clerical credit / debit interest charge by entering ‘Y’ in the Raise or Amend Interest Charge as Calculated field
10.	If you are not sure that the details are correct then exit the function and check the calculation using Function DINT (Display Interest Computation)
11.	When you have raised a credit / debit interest charge and the AP becomes overpaid COTAX will display one of two warning messages
	Where the overpayment is to be automatically reallocated or repaid
	Or
	If the overpayment cannot be dealt with automatically the warning message will advise you of the worklist that the overpayment is on. Where you see this message see step 18 below
12.	Where a warning message is not displayed use Function VPPD, View AP Summary screen to check if an underpayment exists on the AP. Where the AP remains underpaid after you create a clerical credit / debit interest charge see steps 19 - 20 below

Top of page

Calculation displayed on Function RMIC screen COT107G Dialogue Box showing Credit / Debit Interest Accrual details is incorrect

13.	If the details displayed on screen COT107G Dialogue Box are incorrect
	Select the [Cancel] button to return to screen COT107G below
	Select the [Print] button to obtain a screen print
	Select the [Accrual Details] button to display the Dialogue Box again
	Review the details (Word 75KB)
14.	Revise the details from the Dialogue Box screen by
	Selecting an entry
	Select the [Amend Accruals] button
	Select the [Amend] or [Delete] buttons as appropriate
	Entering the correct Computation Amount and Accrual To Date on the second Dialogue Box, Manual Interest Calculation Details
	Or a new entry may be made by
	Select the [Amend Accruals] button
	Select the [Add] button
	Entering the correct Computation Amount and Accrual To Date on the second Dialogue Box, Manual Interest Calculation Details
	Alternatively you can use RMIC to do a full recalculation by selecting the [Payments] button. This will then allow you to enter details about the AP and the payments made. From these details COTAX will calculate
	The instalment due dates
	The instalment amounts
	Credit / debit interest due
15.	Check the revised calculation displayed on screen COT107G Dialogue Box carefully and, if correct, raise a credit / debit interest charge by entering ‘Y’ in the Raise or Amend Interest Charge as Calculated field
	If the calculation is still incorrect, repeat steps 13 and 14 or exit the function
16.	When you have raised a credit / debit interest charge and the AP becomes overpaid COTAX will display one of two warning messages
	Where the overpayment is to be automatically reallocated or repaid
	Or
	If the overpayment cannot be dealt with automatically the warning message will advise you of the worklist that the overpayment is on. Where you see this message see step 18 below
17.	Where a warning message is not displayed use Function VPPD, View AP Summary screen to check if an underpayment exists on the AP. Where the AP remains underpaid after you create a clerical credit / debit interest charge see steps 19 - 20 below

Top of page

AP is overpaid after raising or amending a clerical credit / debit interest charge

18.	Where Function VPPD (View Payment and Posting Details), View AP Summary screen shows an amount overpaid, use either
	Function REAW (Direct Reallocation Within COTAX) to reallocate the overpayment within COTAX
	Or
	Function REAO (Direct Reallocation Out Of COTAX) to transfer the overpayment to OAS (Word 28KB) for repayment
	And
	Send a memo to Banking Operations providing details of how the repayment is to be disposed of

Top of page

AP is underpaid after raising or amending a clerical credit / debit interest charge

19.	Where Function VPPD (View Payment and Posting Details), View AP Summary screen shows an amount underpaid
	Issue a full series of payment applications clerically for the tax, penalty and late payment interest that Function VPPD (View Payment and Posting Details) shows as collectible on View AP Summary screen
	Include the net debit interest in the amount of late payment interest due (if any) and treat the net credit interest as a payment
20.	After issuing the full series of clerical payment applications
	Proceed with appropriate recovery / enforcement action

Home | Main Contents | Manual Contents

Previous Page | Next Page | Top | Menu