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HMRC internal manual

COTAX Manual

HM Revenue & Customs
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Penalties: penalty determinations: action required to prevent repayment and penalty issue on the same day

Where you issue an assessment or tax determination and a penalty stage has been reached but not charged, you are presented at the end of function RAMA (Record /Amend Assessment) with a penalty action options box.

The options displayed are as follows.

  • Auto Issue. If you choose this option, COTAX issues the penalty 14 days later unless the case is RLS. COTAX does not issue the determination until a new address has been entered on the record.
  • Use PPEN. COTAX takes you to that function.
  • No penalty required. COTAX sets the NPR signal to inhibit penalty issue for the AP.


  • COM23000 onwards for guidance on how to raise assessments or revenue determinations
  • COM101050 for guidance on how to make penalty determinations.

You should note that COTAX automatically repays any overpaid tax if you create or amend the tax charge then make a related penalty determination. It does not reallocate the overpayment against the penalty determination even when they are made on the same day.

This happens every time a company has made a payment, submits its return late and the tax charge is less than the amount already paid.

You need to prevent COTAX from issuing a repayment of tax and a payment application for a penalty. To do this, use function MAPS (Maintain AP Signals) to select ‘Reallocations & Repayments’ from the drop down menu for the Manual Inhibitions field to inhibit repayments and reallocations before creating or amending the tax charge.

Remove the inhibition after you have created or amended the tax charge and the penalty determination. COTAX then issues a payment application for any net penalty amount or repays any remaining overpaid balance.

See COM101031 for a list of functions to use in particular situations.