COM10112 - Appeals: handling appeals and postponements: postponement creating overpayment (Action Guide)

When you use function HAPP (Handle Appeal) to record a postponement that would cause an overpayment and you see the following message ‘This will create an overpayment that will be listed on the LOPD (Overpayments work list) - inform the inspector’, consider steps 1 - 7 below.

1.  If the decision maker agrees to the overpayment, use function HAPP to:

  • reduce the informal standover to nil
  • record the amount included in the formal postponement request which will make the Accounting Period (AP) overpaid

Use function VPPD (View Payment and Posting Details) to check if there are any other outstanding COTAX arrears. Where there are, go to step 2.

Check if there are any other arrears outside COTAX.

If there are no arrears, go to step 4.

2.  If there are outstanding COTAX arrears, reallocate the overpayment using function REWD (Direct Reallocation Within COTAX).

3.  If there are other arrears outside COTAX:

  • reallocate the overpayment to OAS using function REOD (Direct Reallocation Out Of COTAX)
  • complete the Intelligent Payment Processing (IPP) single form to instruct HMRC Payments how to allocate the amount, please ensure you enter the EDP of the reallocation into COTAX to allow HMRC Payments to deal with the interest as appropriate

COM120100 has guidance on completing the IPP form.

4.  If there are no arrears repay the overpayment using function DIRR (Direct Repayment).

Please follow the below step 5 and 6for any area outside of CT Services or step 7 for staff in CT Services.

5.  If the decision maker or Customer Compliance Manager (CCM) does not agree to the overpayment take the following actions:

  • use function HAPP to reduce the informal standover that you set at step 1 to nil
  • enter the decision maker’s counter proposal in the ‘postponed amount’ field. COTAX uses that figure when it issues the postponement alternative proposal form 64-5(1)
  • set the postponement status to ‘disputed’. COTAX formally postpones any unpaid tax for the AP when it issues form 64-5(1)
  • BF the case for return of the agreement to alternative proposal form 64-5(2)

6.  When you receive the company’s response to the counter proposal, follow the guidance at COM10054 steps 6 to 8 as appropriate.

7. When handling CT penalty appeals, if the penalty appeal standover creates an overpayment follow local LOPD guidance.