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HMRC internal manual

COTAX Manual

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Repayments / reallocations: repayment / reallocation authorisation: Large repayments - responsible office

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) COM124050(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

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  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
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  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

The remainder of this subject is presented as follows

Repayment to debit or credit card
Repayment by Bacs
Repayment by payable order
Repayment by manual payable order
Repayment to be made by using OAS
Repayment from the SAFE system or CTA archive

Repayment to debit or credit card

COTAX applies rules to decide whether repayment must be made to debit or credit card.

The conditions are that:

  • the repayment is not for interest only
  • the card payment was not made more than nine months before the date of the repayment
  • the repayment does not exceed £98,500
  • the repayment does not exceed the amount of the original card payment, less any repayments already made to the card.

If the conditions are met, the repayment must be made to the original payment card and cannot be made by another method or to a nominee.

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Repayment by Bacs

You must try to make all repayments of £150,000 or more using Bacs as it is the most secure, cheapest and quickest way to make a repayment.

To make a repayment by Bacs, the latest bank details should always be used. Where bank details have been provided, these are stored in COTAX and you can view them in function VTPR (View Taxpayer Record) on the Bank and/or Nominee Details page. Bank and/or nominee details are updated automatically from the last original return to have been received, an amended return where the amendment has been automatically processed by COTAX, or clerically using function BOND (Bank and / or Nominee Details) from one of the following:

  • a signed letter from the company or its authorised agent on headed notepaper
  • an email from the overpaid company or its authorised agent from a known and trusted email address
  • a fax on company headed notepaper or its authorised agent’s headed notepaper from a known and trusted fax number.

Where the bank account details are not held, you should contact the company and ask them to provide bank account details in a letter, email or fax. You should only make the repayment by payable order in exceptional circumstances where you have been unable to obtain bank account details.

Unless bank details are received on an online CT600 and automatically captured, you must use function BOND (Bank and / or Nominee Details) to record the account details on the COTAX record as soon as they are received.

Where you have not used the correct bank account details, the RSA needs to cancel the repayment so the correct details can be used.

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Repayment by payable order

Due to security reasons, we never make a repayment of £150,000 or more using the COTAX system to issue a payable order. You should, wherever possible, use Bacs as the preferred method of repayment. However, if you have been unable to obtain Bacs details, you may issue the repayment using a manual payable order.

Where you have not done this, the RSA needs to refer the case back to you or consider cancelling the repayment so the correct method of repayment can be used.

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Repayment by manual payable order

Where the repayment is for £150,000 or more and you have been unable to obtain bank account details, you should make the repayment using a manual payable order. COM125020 outlines the Manual Payable Order process you should follow and there is information on the Finance intranet pages.

You should use function DIRR (Direct Repayment) and create the repayment by selecting ‘Y’ in the manual repayment option. You should complete a Payable Order Request Form (PORF) from SEES, including any repayment interest that may be due, which is displayed in function DIRR. Once you have completed the form, it should be authorised in accordance with the guidance provided by Finance.

The RSA is responsible for carrying out the security checks and once these have been satisfied they should submit the PORF for repayment.

The RSA should obtain the payable order details from the Payable Order data base and use function MIPO (Manually Issued Payable Order) to enter the details on COTAX.

Notes:

  1. It is the responsibility of the RSA’s manager to ensure that the RSA is given access to the PORF ‘posting’ facility.
  2. It is important that the manual repayment is recorded on COTAX using MIPO as failure to do so can result in a duplicate repayment being made and when the company uses Your Tax Account online, it appears that there is still an overpayment.
  3. If there has been any delay in issuing the repayment, any additional repayment interest will be automatically calculated once the date repayment is issued is entered onto COTAX.

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Repayment to be made by using OAS

Where you cannot make the repayment using the COTAX system, you need to use function REOD (Direct Reallocation Out of COTAX) to move the money into OAS so the repayment can be made by the CT Unit in Cumbernauld.

Local Compliance Office

Where the reallocation is made from a Local Compliance office, regardless of the amount involved, the caseworker is responsible for:

  • moving the money into OAS
  • completing form CT251 from SEES.

Where the amount to be repaid is less than £250,000, the caseworker is also responsible for emailing it to:

  • CT Unit, CT Ops Enquiry (DMB Banking) if you work outside the LB
  • CT Unit, LBS Enquiry (DMB Banking) if you work in the LB.

Where the amount to be repaid is £250,000 or more, the caseworker must complete page 1 of the R49 and pass the repayment papers along with the CT251 and R49 (pages 1 and 2) to the R49 checker.

Once the R49 checker has completed the R49 checks, they should email the CT251 to:

  • CT Unit, CT Ops Enquiry (DMB Banking) if you work outside of the LB
  • CT Unit, LBS Enquiry (DMB Banking) if you work in the LB.

COM120100 has guidance on completing the CT251.

Notes:

  1. Where the R49 checks are not carried out on site, you must find an available R49 checker before making the reallocation.
  2. The reallocation must be done on the same day the papers are passed to the R49 checker.
  3. The R49 checker must carry out their checks as soon as possible and once satisfied that the repayment can be made, immediately email the CT251 to Cumbernauld to avoid delays in making the repayment.
  4. If the R49 checker rejects the repayment, the reallocation must be reversed within 24 hours of this decision being made.

LB office

Where the reallocation is made from an LB office, regardless of the amount involved, the case worker is responsible for:

  • moving the money into OAS
  • completing form CT251.

Where the amount to be repaid is:

  • £150,000 or more, but less than £250,000 they should pass the repayment papers along with the CT251 to the RSA to carry out the R400 security checks
  • £250,000 or more, they should complete page 1 of the R49 and pass the repayment papers along with the CT251 and R49 (pages 1 and 2) to the R49 checker. Once satisfied that the repayment can be made, the R49 checker will pass the papers to the RSA to carry out the R400 security checks.

Once the RSA has completed the security checks and has authorised the repayment they must email the CT251 to Cumbernauld (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

If the R49 checker rejects the repayment, the reallocation must be reversed within 24 hours of this decision being made.

COM120100 has guidance on how to complete the CT251.

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Repayment from the SAFE system or CTA archive

Where a charge is held on the SAFE system or as an archived CTA charge, a repayment may arise following an amendment to the charge. COM23130 provides guidance on how to amend these types of charges.

Local Compliance record

Where the repayment is for a Local Compliance record:

  • the caseworker must complete the relevant SAFE 1 (NEW) or SAFE (2) stencil and pass it to their SAFE user to make the amendment on SAFE and
  • where the amount to be repaid is less than £250,000, they should sent the stencil to the Miscellaneous Charges Unit at Shipley to carry out the security checks and make the repayment or
  • where the amount to be repaid is for £250,000 or more, the SAFE user must return the stencil to the caseworker so that they can:

    • complete page 1 of the R49
    • pass the repayment papers along with the SAFE stencil and R49 (pages 1 and 2) to the R49 checker, who is responsible for completing the R49 checks
    • once the R49 checker is satisfied that the repayment can be made they will send the SAFE stencil to the Miscellaneous Charges Unit at Shipley to carry out the security checks and make the repayment.

LB record

Where the repayment is for an LB record:

  • the caseworker must complete the relevant SAFE 1 (NEW) or SAFE (2) stencil and pass it to their SAFE user to make the necessary amendment on SAFE and
  • where the amount to be repaid is less than £250,000, they should send the stencil to the Miscellaneous Charges Unit at Shipley to carry out the security checks and make the repayment or
  • where the amount to be repaid is for £250,000 or more, the SAFE user must return the stencil to the caseworker so they can:

    • complete page 1 of the R49
    • pass the repayment papers along with the SAFE stencil and R49 (pages 1 and 2) to the R49 checker, who is responsible for completing the R49 checks
    • once the R49 checker is satisfied that the repayment can be made they should pass the repayment papers to the RSA to carry out the R400 security check
    • on completion of these checks the RSA sends the R49 to the Miscellaneous Charges Unit in Shipley.

Noting COTAX

In all cases, when the R49 is received and accepted by the RSA, they should use COTAX function NOTE to show ‘R49 authorised and filed at (appropriate location)’.

See:

  • COM126000 for more information about these cases
  • COM124041 for a list of forms relevant to this subject.