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HMRC internal manual

COTAX Manual

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HM Revenue & Customs
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Repayments / reallocations: overpayments: general: inhibit automatic process

COTAX sets inhibit signals automatically against specific APs or companies in certain circumstances. Where you need to prevent COTAX from making an automatic reallocation or repayment you can do this by setting the appropriate inhibit signal using function MAPS (Maintain AP Signals) or MRSC (Maintain Rept / Realloc Signals) if you are in the responsible office, or function RAPP (Revise AP Pursuit) or RTPP (Revise Taxpayer Pursuit) if you are in DMB.

The signals are:

Where you manually inhibit repayments and / or reallocations, you should also use function NOTE (Case Notes) to say why you have done so.

Inhibit repayments only

This signal can be set automatically by COTAX or you can set it manually. It is set automatically on a specific AP when a payment is received by cheque that causes an overpayment, to allow time for the cheque payment to clear the bank.

This signal:

  • only inhibits automatic repayments on the AP against which the signal is set, unless it has been set at company level, when COTAX inhibits automatic repayments on all APs of a company
  • allows COTAX to continue making reallocations automatically
  • is automatically unset after 14 days where it is set automatically and cannot be unset except by COTAX
  • can be unset where it was set manually.

You should use function MRSC (Mlaintain Repay / Realloc Signals (Company)) to inhibit repayments whenever you take action that may lead to a monetary event on a COTAX record for a struck off company. If you do not, an inappropriate automatic repayment may be issued.

Inhibit reallocations and repayments

This signal can be set automatically by COTAX or you can set it manually. It is set automatically when:

  • a company asks DMB banking to allocate a payment against a specific duty type such as a penalty charge, and this posting causes that duty type to become overpaid
  • a closure notice with revenue amendment has been issued.

This signal:

  • stops all reallocations or repayments automatically for any AP against which the signal is set unless it has been set at company level, when COTAX inhibits automatic repayments and reallocations on all APs of a company
  • can be unset by you, even if has been automatically set by COTAX because a specific duty type became overpaid
  • cannot be unset where it was automatically set because a closure notice with revenue amendment has been issued
  • will be unset after 14 days where it was automatically set by COTAX.

Multiple returns

The multiple returns (Word 33KB) signal is set at company level when a return is captured that indicates that more than one return has been submitted for this company on the same day.

The signal:

  • inhibits all automatic reallocations and repayments for all APs
  • is set automatically for 14 days and remains in force even if part of the overpayment is repaid or reallocated within the 14 days
  • can be changed manually to ‘none’.

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Cancelled repayment inhibit

The cancelled repayment inhibit (Word 33KB) is set automatically at AP level when a repayment is cancelled.

This signal:

  • shows that an issued repayment has been cancelled
  • is unset automatically if the charge is increased or the AP becomes balanced
  • can be unset manually.

It is recommended that you:

  • do not manually unset the cancelled repayment inhibit as this could lead to COTAX incorrectly reissuing the cancelled repayment
  • make repayments using function DIRR (Direct Repayment) when you are ready to go ahead with the repayment.

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Inhibit repayment amount specified by company

This signal is set when a specific amount has been entered on the company tax return requesting that a repayment of a specific amount or less is not to be repaid.

The signal:

  • stops COTAX automatically repaying any amount specified by the company (or less)
  • can be amended by you.

Subject to normal conditions shown at COM125000 onwards, overpayments of the COTAX value of £20 or less, or the company specified amount or less are:

  • reallocated to other liabilities, or
  • reallocated to any accounting period where the liability is not yet due, or
  • entered on the LOPD (Overpayments Work List) with a reason - ‘Small repayment no auto reallocation’.

All these signals can be set for a number of reasons. It is important to understand why a signal was set, and to be sure that it is no longer needed before you unset it. Always check COTAX notes.

See:

  • COM120011 for a list of functions to use in a particular situation
  • COM120012 for legislation applying to this subject.