COM122034 - Repayments / reallocations: non automatic reallocations: surrender non COTAX repayment to COTAX (Action Guide)

To make a set off of a non COTAX repayment against COTAX, consider steps 1 - 13 below. The guide is presented as follows.

Set off Income Tax or payment of Tax Credit amount Steps 1 - 5
Set off interest Steps 6 - 10
Set off a SAFE repayment against COTAX Steps 11- 13

Set off Income Tax or payment of Tax Credit amount

1. Use function VPPD (View Payment and Posting Details) to check the payment and postings record for the AP of the recipient company 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, exceptionally, the set off will make the AP of the recipient company overpaid, use function MAPS (Maintain AP Signals) and select ‘Reallocations & Repayments’ from the drop down menu for the Manual Inhibitions field on the recipient company’s COTAX record.

You can not make a superseded AP overpaid.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 Payment
  • 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.

If you allocate the set off to tax, COTAX calculates any repayment interest that is due for the following duty types:

  • IT deducted at source
  • 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 credit.

4. Use function VPPD for the recipient company 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 Inhibition field at step 3, use MAPS again to select ‘None’ from the drop down menu for the Manual Inhibitions field on the recipient company’s COTAX record.

The repayment will not be issued for 14 days after you have used function DSET.

See COM122010 for guidance on DSET codes.

Set off interest

6. Use function VPPD to check the payment and postings record for the AP of the recipient company against which you intend to make the set off.
If a colleague has already made the set off you will see a payment posting ‘PYT’ 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 on the recipient company’s COTAX record.

You can not make a superseded AP overpaid.

8. Use function DSET on the recipient company’s COTAX record to set off 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
  • 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.

9. Use function VPPD on the recipient company’s COTAX record to check the results by looking for a ‘PYT’ posting endorsed ‘DSO’ in the ‘Notes’ column.

10. If you used function MAPS to select ‘Reallocations & Repayments’ from the drop down menu for the Manual Inhibition field at step 8, use Function MAPS again to select ‘None’ from the drop down menu for the Manual Inhibition field on the recipient company’s COTAX record.

The repayment will not be issued for 14 days after you have used function DSET.

Set off a SAFE repayment against COTAX

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 > under the ‘SAFE’ category.

12. 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/interest that is due including the ‘from’ and ‘to’ dates in this space.
  • 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 in the ‘Repayment Nominee’ box.

See COM122010 for a table of Effective Dates of Payments.

13. The Miscellaneous Charges unit will arrange to reallocate the set off to the COTAX charge using OAS.