COM82034 - Interest: interest objections and amendments: considering a credit / debit interest objection (Action Guide)

Notice to deliver not received / received late

Step 1

Return still outstanding

Step 2

Claim for an earlier EDP

Steps 3 - 8

Payment incorrectly allocated

Steps 9 - 10

Tax charge decreased

Steps 11 - 14

Claim that not all payments included in interest calculation

Step 15 - 21

Quarterly instalment signal set incorrectly

Step 22 - 28

Interest charge correct

Step 31 - 32

Interest charge is incorrect

Step 33

1.

If a company objects on the grounds that the notice to deliver (Word 29KB) was received late or not at all

• Advise the company that this does not constitute a valid objection. The interest is correctly due and payable. See step 28 on the actions you need to take. The legal requirement of a notice to deliver is that the company deliver a return. Payment should therefore always be made by the instalment due date (Word 42KB)

2.

If the company states that the return is still outstanding and a Revenue Determination (Word 29KB) has been made

• Advise the company that the credit interest (Word 34KB) and debit interest (Word 31KB) charge is correctly due and payable on the tax that has been charged. See step 28 for the actions you need to take

3.

If the company states that a payment (Word 26KB) was made earlier than the date recorded on the AP check the posting type (Word 73KB) on the postings screen on Function VPPD (View Payments and Postings Details) by selecting the posting and clicking on the [OK] button

4.

Where the posting type is BLP (payment made by cheque) then advise the company that the payment was not received until the date posted on the record and that the credit / debit interest charge is correctly due and payable. See step 28 for the actions you need to take

5.

Where the posting type is

• BGP (Bank Giro)

• BAC (Bankers Automatic Clearing Service)

• NGP (National Giro)

• BGT (Bank Giro or Chaps)

Check with the Banking Operations Shipley for any delays in payments being processed and posted to the AP. If there have been any delays use function AEDP (Amend Effective Date of Payment) to amend the EDP (Word 41KB) to the correct date. See step 30 on how to amend the credit / debit interest charge

6.

Where the posting type is

• IRP (Inland Revenue Payable Order)

• DSO (District Set-Off)

• LOP (Local Office Payment)

Check with the Banking Operations Shipley that the correct EDP has been given. If an incorrect EDP has been posted then use Function AEDP (Amend Effective Date of Payment) to amend the EDP. See step 30 on how to amend the credit / debit interest charge

7.

Where the posting type is RFR (Reallocate from) check that the correct EDP has been given to the reallocation. If an incorrect EDP has been posted then use Function AEDP (Amend Effective Date of Payment) to amend the EDP. See step 30 on how to amend the credit / debit interest charge

8.

Where the correct EDP has been given to the payment then advise the company that the credit /debit interest charge is correctly due and payable. See step 28 for the action you need to take

9.

Use Function VPPD (View Payment and Postings Details) postings screen to check that payments have been correctly allocated to the company’s record. Where payments have been misallocated, correct the record and see step 30 on how to amend the credit / debit interest charge

10.

If the company’s record is correct then explain that the payment allocation is correct and that the credit / debit interest charge is correctly due and payable. See step 28 for the action you need to take

11.

Use Function DINT (Display Interest Computation) to find out how the credit / debit interest has been calculated. Take screen prints if necessary as you will need to check this against VPPD (View Payment and Postings Details)

12.

Use Function VPPD (View Payments and Postings Details) postings screen to find out what the revised tax charge (Word 28KB) is

• A reduction in the tax charge will have amended the amounts due for each quarterly instalment

13.

Check that credit / debit interest has been calculated on the correct tax charge and instalment amounts

14.

If the credit / debit interest has not been calculated on the revised tax charge and instalment amounts see step 30 on how to amend the credit / debit interest charge

15.

Use Function DINT (Display Interest Computation) to find out how the credit / debit interest has been calculated. Take screen prints if necessary as you will need to check this against VPPD (View Payments and Postings Details) postings screen

16.

Use Function VPPD (View Payments and Postings Details) postings screen to check the payments made against the AP

17.

Compare the interest calculation with the payments made

18.

Where payments have been transferred out to

• OAS (Word 28KB), COTAX may not have included these in the calculation. See subject ‘Clerical Calculation Of Credit / Debit Interest (COM80080)’ in section ‘How Interest Is Calculated’

• Another AP / Company, common period (Word 29KB) rules will have been applied by COTAX

19.

Where payments have been transferred in and

• Credit / debit interest had been calculated before the transfer

And

• The Credit / Debit Interest Indicator (CDII) (Word 29KB) is set to ‘Y’

Interest may not have been recalculated to take these payments into account

20.

Check the credit / debit calculation has been calculated on the payments that should be included in the calculation. Be careful to apply common period rules, flow charts on how to apply the rules are available on the COTAX intranet site under ‘Where to get help'

21.

If the credit / debit interest charge is incorrect see step 30 on how to amend it

22.

Check Function DRTN (Display Return) to see if box 79 has been completed

23.

Check Function DAPD (Display AP Details) Enquiry and Other Details to find out if the quarterly instalment payment (Word 42KB) QIP signal is set to ‘N’ or ‘Y’

24.

Contact the Inspector with these details and ask for him to confirm the correct signal for the AP

25.

Where the signal is incorrect make sure that it is corrected by the Inspector

26.

If the Credit / Debit Interest Indicator (CDII) is not set then COTAX will automatically recalculate the credit / debit interest

27.

If the Credit / Debit Interest Indicator (CDII) is set then see step 30 on how to amend the credit / debit interest charge

28.

Where the quarterly instalment payment QIP signal has been set correctly then the credit / debit interest charge is correctly due and payable. See step 28 for the action you need to take

31.

If the interest is correct

• Send a letter of explanation to the company

• Use Function RAPP (Revise AP Pursuit) to cancel RFI

32.

Continue with collection

33.

If the credit / debit interest is incorrect, you will need to amend it. For more information on how to do this see Action Guides ‘Clerical Calculation Of Credit / Debit Interest’ (COM80084) in section ‘How Interest is Calculated’ of this business area