COM122014 - Repayments / reallocations: non automatic reallocations: functions: reallocation into COTAX - responsible CT office (Action Guide)
To set off an overpayment from outside COTAX against an AP on the company’s COTAX record, consider steps 1 - 18 below. The guide is presented as follows.
| Set off an interest bearing amount | Steps 1 - 5 |
|---|---|
| Set off interest | Steps 6 - 10 |
| Set off R&D Tax Credit, Film Tax Credit, Television Tax Credit or Video Games Tax Credit | Steps 11 - 15 |
| Set off a SAFE repayment against COTAX | Steps 16 - 18 |
Set off an interest bearing amount
1. Use function VPPD (View Payment and Posting Details) to check the payment and postings record for the AP against which you intend to make the set off. If a colleague has already made the set off there will be a payment posting ‘PYT’ shown in Function VPPD with ‘DSO’ in the ‘Notes’ column.
2. If the set off will make the receiving AP overpaid, use function MAPS (Maintain AP Signals) and select ‘Reallocations & Repayments’ from the drop down menu for the Manual Inhibitions field. You can not make a superseded AP overpaid.
3. Use function DSET (District Set Off) to set off the overpayment. Make sure that you:
- enter the correct EDP (Word 41KB). See COM122010 for a table of effective dates of payments
- select the duty type being set off from the drop down menu for the Type of Set off field. Do not enter the duty against which you are making the set off in this field
- enter how you want the set off to be allocated. This is either specific amounts against tax, interest or penalties or automatically allocated according to the normal rules. See COM120020 for more information and COM122010 for guidance on DSET codes.
If you allocate the set off to tax, COTAX calculates any repayment interest that is due for duty types IT deducted at source or Construction Industry Scheme (CIS25/SC60) to 5 April 2002.
COTAX calculates any repayment interest that is due for the following duty types provided the EDP has been reached:
- Research & Development Tax Credit
- Land Remediation Tax Credit
- tax credits.
4. Use function VPPD to check the results by looking for a ‘PYT’ posting endorsed ‘DSO’ in the ‘Notes’ column.
5. If you used function MAPS and selected ‘Reallocations & Repayments’ from the drop down menu for the Manual Inhibitions field at step 3 and you have repaid or reallocated any resulting overpayment, use Function MAPS to select ‘None’ from the drop down menu for the Manual Inhibitions field.
Set off interest
6. Use function VPPD to check the payment and postings record for the AP against which you intend to make the set off. If a colleague has already made the set off, there will be a payment posting ‘PYT’ shown in function VPPD with ‘DSO’ in the ‘Notes’ column.
7. If the set off will make the receiving AP overpaid, use function MAPS (Maintain AP Signals) and select ‘Reallocations & Repayments’ from the drop down menu for the Manual Inhibitions field. You can not make a superseded AP overpaid.
8. Use function DSET to set off the interest. Make sure that you:
- enter the EDP as ‘today’s’ date
- select ‘Repayment Interest’ or ‘Repayment Supplement’ as appropriate, as the duty type being set off from the drop down menu for the Type of Set off field
- select ‘Repayment Interest’ or ‘Repayment Supplement’ as appropriate, as the duty type being set off from the drop down menu for the Type of Set off field.
9. Use function VPPD to check the results by looking for a ‘PYT’ posting endorsed ‘DSO’ in the ‘Notes’ column.
10. If you used function MAPS and selected ‘Reallocations & Repayments’ from the drop down menu for the Manual Inhibitions field at step 8 and you have repaid or reallocated any resulting overpayment, use Function MAPS to select ‘None’ from the drop down menu for the Manual Inhibitions field.
Set off R&D Tax Credit, Film Tax Credit, Television Tax Credit or Video Games Tax Credit
These set offs are normally carried out in a R&D Unit.
11. Use function VPPD to check the payment and postings record for the AP against which you intend to make the set off. If a colleague has already made the set off there will be a payment posting ‘PYT’ shown in Function VPPD with ‘DSO’ in the ‘Notes’ column.
12. If the set off will make the receiving AP overpaid, use function MAPS (Maintain AP Signals) and select ‘Reallocations & Repayments’ from the drop down menu for the Manual Inhibitions field. You can not make a superseded AP overpaid.
13. Use Function DSET to set off the tax credit. Refer to COM122010 and enter the EDP shown.
For the Type of Set off field, select from the drop down menu as the duty type being set off as follows.
- For R&D Tax Credit select Research & Development Tax Credit.
- For Film Tax Credit, Television Tax Credit or Video Games Tax Credit select Film Tax relief.
14. Use function VPPD to check the results by looking for a ‘PYT’ posting endorsed ‘DSO’ in the ‘Notes’ column.
15. If you used function MAPS and selected ‘Reallocations & Repayments’ from the drop down menu for the Manual Inhibitions field at step 8 and you have repaid or reallocated any resulting overpayment, use Function MAPS to select ‘None’ from the drop down menu for the Manual Inhibitions field.
Set off a SAFE repayment against COTAX
16. Complete a SAFE Repayments stencil (SAFE 1) and give it to your SAFE user who will set the ‘No Repayment’ signal on SAFE if necessary and send the form to the Miscellaneous Charges unit in Shipley. You can find the SAFE 1 stencil at Excel > SEES > Forms and Letters > category ‘SAFE’.
17. Complete the stencil in full and provide the following specific information.
- Enter ‘Repayment Set off’ in the space given to provide the reason for your repayment.
- Give full details of the reason for the overpayment and if appropriate details of any repayment supplement or interest that is due including the ‘from’ and ‘to’ dates for all non S455 CTA 2010 (formerly S419 ICTA 1988) charges in this space.
- Where repayment interest is due for S455, use the specific box to provide the dates from which it should be calculated ‘from’ and ‘to’ so the Miscellaneous Charges unit can correctly calculate the interest due on the set off.
- Enter the UTR, AP number and duty type of where the overpayment is to be allocated and the EDP to be given to the set off to in the ‘Repayment Nominee’ box.
See COM122010 for a table of effective dates of payment.
18. The Miscellaneous Charges unit will arrange to reallocate the set off to the COTAX charge using OAS. You must not use function DSET to set off a repayment arising on a SAFE record, including CT61 charges, against COTAX. All overpayments arising in SAFE are dealt with by the Miscellaneous Charges unit.