CTSA: quarterly instalments: intra-group surrender: procedure
CTA10/S963 (as extended by REG9) is considerably less flexible than a group payment arrangement (see CTM97400 onwards) for neutralising the effect of the credit and debit interest rate differential. Consequently, it is unlikely there will be claims for many such surrenders. However, as liabilities can subsequently change and overpayments occur there may be claims some time after a group payment period has been closed and money apportioned to the participating companies.
Group payment arrangements and Regulation 9
A group payment arrangement is clearly not itself a company. So neither S963 itself, nor its extension under REG9, can apply to any transfer of money between a group payment arrangement and an individual company. This is true whether or not that company is a participator in the arrangement.
Individual participating companies can receive surrenders from group companies under S963, including its extension under REG9. However, whilst money is still held within a group payment arrangement the individual participating companies cannot make a surrender because at that stage they are not treated as having paid any money.
Once a group payment period has been closed and money apportioned to the participating companies, any overpayment on that participator can then be surrendered. This is because payments made by the nominated company are deemed to have been made by the participating companies in the amounts finally apportioned to them, and on the dates they were made by the nominated company (see Clause 11 of the contract at CTM97430 / CTM97440).
Reallocations to companies not in a group relationship
As with S963 surrenders, you may receive requests to ‘surrender’ a refund to another company that do not meet the conditions for a S963 surrender. For instance, the ‘surrender’ might be to an associated company.
Deal with such request in the same way as for similar requests to make S963 surrenders. But the date of reallocation is the effective date of payment for the purpose of calculating any interest due to, or from, either the donating or recipient company.
Surrenders under S963, as extended by REG9, are dealt with in COTAX function REWD. For detailed information about giving effect to these surrenders see the COTAX Manual (COM) in the Repayments/Reallocations business area.