Repayments / reallocations: overpayments: general: automatic repayment / reallocation
COTAX handles most overpayments automatically providing certain conditions (Word 40KB) exist on the AP.
- calculates and adds any repayment interest (RPI) due
- recalculates any late payment interest (LPI) due
- calculates and adds any credit interest due
- reallocates all or part of the total amount overpaid against any outstanding amount within COTAX
repays any balance overpaid unless
- repayment to card is inappropriate, see COM120050 for more information
- the repayment is below the amount which the company has said it does not want to be repaid
- the company has not provided bank details and the overpayment is for £20 or less.
Where these conditions apply COTAX, if possible, reallocates the overpayment to an outstanding or future AP. Where COTAX cannot automatically reallocate the overpayment, it enters the case on one of the overpayment worklists. COTAX never automatically issues a repayment that is for £20 or less by payable order.
In quarterly instalment payment cases, COTAX also calculates any debit interest chargeable.
COTAX does not make an automatic reallocation or repayment when:
- certain conditions exist on the overpaid AP
- the operator has set signals inhibiting automatic processing.
In addition, COTAX does not make automatic reallocations when certain conditions exist on the potentially receiving AP.
See COM120020 for more information about the conditions that prevent COTAX from making an automatic reallocation or repayment.
After you have taken a relevant action (Word 31KB) that produces an overpayment on an AP, providing certain conditions (Word 40KB) are satisfied and there are no inhibitions to prevent an automatic reallocation taking place, COTAX immediately:
- reallocates the overpayment from the overpaid AP to a receiving AP with an outstanding amount due, an AP becoming due within the next 60 days for overpayments more than £20 or any AP regardless of when it becomes due for overpayments of £20 or less
- where appropriate calculates and reallocates any repayment interest due.
COTAX only reallocates automatically to a receiving AP if one of the following conditions applies and there are no inhibitions present to prevent an automatic reallocation taking place.
- The normal due date (Word 49KB) for payment has already passed and a charge exists on the record.
- The normal due date is no more than 60 days ahead whether or not a charge exists on the record.
- Where the overpayment is £20 or less and COTAX does not hold any bank details for the company.
The normal due date rule of more than 60 days ahead does not apply, and a reallocation will be made to any future AP regardless of when it becomes due where:
- the company have specified a specific amount for which they don’t want to receive repayments
- the overpayment is for £20 or less, repayment to debit or credit card is not appropriate and we don’t hold any bank details on COTAX.
See COM120030 for details of the inhibitions that prevent automatic reallocations.
If all the above conditions are satisfied, COTAX automatically reallocates the overpayment, and where applicable any repayment interest, to any outstanding AP or APs, starting with the oldest AP first and then to any APs becoming due in the future.
COTAX selects payment type postings in effective date of payment (EDP (Word 41KB)) order starting with the most recent first, but if credit interest and / or repayment interest is present, these are the last postings to be reallocated.
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
Where there are no outstanding liabilities or future APs that COTAX can automatically reallocate the overpayment to, it automatically repays the overpayment unless the:
- ‘inhibit repayment’ signal has been set to ‘Y’ at AP or company level
- inhibit small repayment with a specified amount applies
- overpayment is £20 or less, repayment to debit or credit card is not appropriate and bank details are not held in COTAX.
Instead, COTAX either reallocates to a future liability or enters the overpayment on to one of the following work lists.
- LOPD (Overpayments List).
- LOPU (Overpayments Review List).
COTAX does not repay any cheque payments until after 14 days of receipt to allow time for the cheque to clear. These overpayments appear on work list ORUR (Overpayments Requiring Urgent Review) and are automatically repaid once the 14 days have passed.
- COM120050 for further information on the method of repayment and payee details
- COM120011 for a list of functions to use in a particular situation
- COM120012 for legislation applying to this subject.