COM96010 - Payments: group payment arrangements: closing / clearing a group payment arrangement

The closing date for every Group Payment Period (GPP) (Word 27KB) is the later of

• Whichever statutory filing date (Word 42KB) is the latest, out of all the filing dates of the participating companies (Word 28KB) for returns for a GPP

And

• The day when you receive the last of these returns, or make a Revenue Determination (Word 29KB) of tax in the absence of a return

The Group Payment Team (Word 28KB) in Banking Operations issue a notice of closure (form CT630) from COTAX to the Nominated Company (Word 28KB), showing

• The payments held on the Group Payment Record (GPR) for that GPP
• The liabilities of the participating companies as at the closing date

And

• Any under or overpayment

If there is an underpayment the notice requests payment. If there is an overpayment the notice asks how it is to be dealt with.

The Group Payment Arrangement (GPA) contract requires the notice of closure to be issued to the Nominated Company and there is no facility in COTAX to record the details of an agent.

The Nominated Company has the right to apportion the payments including any balancing payment made between the participating companies and the notice asks the Nominated Company how it wishes to do this. The Nominated Company may apportion payments to leave an underpayment on a particular participating company record. Any credit balance forms part of the monies to be apportioned unless the Nominated Company claims repayment within 30 days.

If disposal instructions are received within 30 days of the request, payments are apportioned to the participating companies accordingly. If no reply is received, or if amounts remain unapportioned, the Group Payment Team issues a further document from COTAX (Apportionment Notice, form CT631) showing the proposed apportionment from HMRC. The Nominated Company has a further 30 days to amend the proposed apportionment.

After all the payments have been apportioned the GPA for that GPP is regarded as cleared and the GPP cannot be reopened although in certain circumstances the payments can be reapportioned. Co-ordinating Inspectors are not specifically advised when the GPP is closed or cleared.

Each participating company is then treated, for all purposes except the calculation of tax related (Word 30KB) penalties as having paid the amounts allocated to it on the dates they were actually paid by the Nominated Company. For more information about tax related penalties see the Company Taxation Manual (CTM) at CTM97570 and the ‘Penalties’ business area.

The GPA is of no further relevance for that AP. Any interest consequences are calculated accordingly. If the tax liability of a participating company later changes, any further liability is its own responsibility and any repayment is made to it.

(This text has been withheld because of exemptions in the Freedom of Information Act 2000)

For a list of forms relevant to this subject, see COM96011.

For legislation applying to this subject, see COM96012.