COM120100 - Repayments / reallocations: overpayments: general: IPP Helpcard
General information
Important points to note
Reallocations
Effective date of payment (EDP)
Permanent overpayment case - reason for POP must be provided
Bona vacantia
Large repayments
Repayments
Repayment / reallocation interest
Reallocation of repayment / reallocation interest
General information
You should use the Intelligent Payment Processing (IPP) Single Form to advise Corporate Finance where you have moved an overpayment from COTAX to OAS using function REOD (Reallocation out of COTAX) and it needs to be reallocated or repaid. This is when:
- an amount is a permanent overpayment (POP)
- the company has been struck off, so all overpayments are subject to Bona Vacantia
- an amount is to be reallocated to another duty type for the company, such as PAYE or VAT
- an amount is to be reallocated to CT of the company held on another system, such as SAFE
- an amount is to be reallocated to another company in circumstanceswhere S963 CTA 2010 (formerly S102)/Reg9 does not apply.
Important points to note
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You must not use this form where you need to make a reallocation to another company under S963 CTA 2010 (formerly Section 102), Regulation 9 or a reallocation to another COTAX AP of the same company. You should use function REWD and select the correct reallocation option. If COTAX will not let you make the reallocation, contact the COTAX Helpdesk by email using the BusinessUserSupport, COTAX address for assistance.
Reallocations
You must always provide a full and correct reference of where the payment is to be reallocated to. If you only advise that the payment is to go to SAFE, VAT, PAYE, Insolvency, Enforcement Office and so on, Corporate Finance will not be able to make the reallocation.
References must be in the proper format and provide the account period end or year. See the examples below.
COTAX (Including APE)
123 1234567890 01 01 2007
AP number
14
PAYE
123P012345 0901
RTI
123PV12345678
Self Assessment
1234567890
SAFE
X000012345678
VAT
123 4567 89
Effective date of payment (EDP)
It is very important that interest is calculated correctly so customers receive full credit for sums to which they are legally entitled, and the exchequer suffers no loss from giving a credit that is not due.
Because in the majority of cases the EDP is the date of reallocation, Corporate Finance always uses an EDP of the date of reallocation when calculating repayment interest (RPI) except where the following apply.
- The date of reallocation is not the correct EDP. In these cases, you must make a note on COTAX advising of the correct EDP for the reallocation, a reason why an alternative EDP has been provided and where the Repayment Interest is to be allocated.
Permanent overpayment case - reason for POP must be provided
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Bona vacantia
Where a company has been struck off and dissolved at Companies House, all overpayments are deemed bona vacantia (BV) and must be reallocated out of HMRC and treated as a repayment to the BV recipient. You must use function REOD (Direct Reallocation Out Of COTAX) Class 3 Repay. On the IPP form, select "Add Repayment", select the option "Bona Vacantia", and then select the appropriate account from the dropdown.
Large repayments
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Repayments
You should only reallocate a payment into OAS to make a repayment where the accounting period is still under enquiry OR where COTAX will not allow you to use function DIRR (Direct Repayment), OR repayment is to a foreign bank account and to be made by CHAPS, OR where bona vacantia applies.
Where the repayment is for £150,000 or more, the repayment will be made by CHAPS. Before it can be issued, the company or its authorised agent provide the necessary details of its own or a nominee’s bank or building society account. A company or its authorised agent gives the details in the CT600 or in writing on company or agent’s headed paper. They must provide:
- agreement to the repayment being made by CHAPS
- bank account number
- bank sort code
- the account name into which the repayment is to be made
- the banks name and address
- if a foreign bank account, confirmation they will accept repayment in sterling.
Since the introduction of confirmation of payee process by banks you must ensure payee details precisely match those held by the bank. If they do not match, the repayment will be stopped and the caseworker will have to obtain correct details and reprocess the repayment.
You should send these details to Corporate Finance on the IPP form and they will then make the repayment for you.
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Repayment / reallocation interest
Repayment interest
Where an amount to be repaid, Corporate Finance calculates any repayment due.
Reallocation interest
Interest should always be given on reallocations except in the following circumstances.
- The overpayment is to be reallocated to a SAFE charge and is part of a contract settlement.
- The amount is to be reallocated was originally a payment of credit interest, penalty, late payment interest or debit interest.
- The interest rate is 0 per cent.
If there is any other reason why interest should not be given, you must note COTAX explaining why.
Corporate Finance uses function RINT (Repayment Interest Calculation) to calculate the amount of interest due. Interest is due from the day after the material date. The material date is the later of the following.
- The EDP of the payment.
- The EDP of the loss or ACT carry back or S458 relief.
- The due date of the AP from which the payment is being reallocated.
Reallocation of repayment / reallocation interest
You should always advise Corporate Finance if the interest due to the company is to be:
- allocated back to where the original payment came from
- allocated to the same place the reallocation is being made to
- repaid to the company.
Please leave a note on COTAX advising where you would like the money to be allocated to, including the EDP
- Link to the Intelligent Payment Processing (IPP) Single Form