COM125064 - Repayments / reallocations: non automatic repayments: early repayment - responsible office (Action Guide)

To deal with claims to early repayment for CTSA APs before a liability is finalised, consider steps 1 - 14 below. The guide is presented as follows.

Step 1                    Company has not received a notice to deliver and not deliver a company tax return

Steps 2 - 3           Company has made a return which is not under enquiry

Steps 4 - 10         Company has made a return which is under enquiry

Steps 11 - 15         Repayment already made and no repayment interest allowed

Company has not received a notice to deliver and not delivered a company tax return

1.  Use function DIRR (Direct Repayment) to make the repayment. Repayment interest is not added to any repayment made before the normal due date (Word 49KB), or after the normal due date but before a charge is recorded on the AP.

Company has made a return which is not under enquiry

2.  Establish why the return cannot be amended or a proper claim to relief made.

3.  If you are satisfied with the explanation, use function DIRR (Direct Repayment) to make the repayment.

Company has made a return which is under enquiry

4.  Obtain a written request for repayment from the company.

5.  Acknowledge the request in writing with a warning that if the company has to repay some of the repayment, interest may also be charged.

6. Confirm none of the following apply:

  • foreign Bank Account
  • there will be an underpayment or Standover on the record
  • they want a different outcome than what Cotax would automatically calculate, i.e. no repayment interest to be given etc

If they do – go to step 8.

7. If possible use function DIRR to make the repayment. See COM125030 for guidance on how to use function DIRR.

8. If any of the bullet point at step 6 applies, you will need to use function MAPS (Maintain Accounting Period Signals) to set the ‘CDII’ signal to ‘Y’ on the AP under enquiry. Then use function REOD (Reallocate Out Of COTAX) to reallocate the amount to be repaid into OAS 'hold pending further instructions (2).

9. On the same day complete the Intelligent Payment Processing (IPP) single form, this will instruct the Corporate Treasury Unit to make the repayment. Please ensure the correct EDP is entered on the form. See COM120100 for guidance on how to complete the IPP form; authorisation is required in most circumstances. 

10.  If the repayment leaves an amount unpaid on the AP under enquiry, informally standover the amount using function HAPP (Handle Appeal) until the enquiry is closed.

Repayment already made and no repayment interest allowed

11. Recover the repayment if it was made by payable order and not yet banked.

12. Follow the On-Line Data Capture (OLDC) Guide ‘cancellation of payable orders after issue’ to obtain authority from Worthing to cancel the payable order and issue a fresh one (form FAO 2601).

13. On receipt use function CNPO (Cancel Payable Order) to cancel the payable order.

14. If the return is now logged, use function DIRR (Direct Repayment) to reissue the repayment and COTAX will add repayment interest.

15. If the repayment was made by Bacs or has already been banked:

  • calculate the repayment interest due using function RINT (Request Repayment Interest Calculation)
  • use function DSET (District Set-Off) to record this amount on the COTAX record as an interest credit
  • repay the repayment interest using function DIRR (Direct Repayment). No spurious repayment interest will be added because you are repaying an amount of interest

See COM122010 for information on DSET codes.