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HMRC internal manual

COTAX Manual

HM Revenue & Customs
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Repayments / reallocations: non automatic repayments: introduction

This subject is presented as follows.

Who makes the repayment
Function DIRR
Overpayment work lists


COTAX does not make automatic repayments when:

  • one or more signals are set which inhibit automatic repayment processing
  • one or more conditions that prevent COTAX from making an automatic repayment are present on the record. See COM121010 for more information.
  • the amount overpaid is equal to or below the small repayments (Word 34kb) limit on the company record
  • the amount overpaid is £20 or less and Bacs details are not held on COTAX.

Amounts of income tax or payment of tax credits are posted on the relevant AP record or records using function DSET (District Set-Off). You must use function DIRR (Direct Repayment) to make the repayment. See COM122010 for more information.

Who makes the repayment

The office that is responsible for the company record normally makes the repayment. The exceptions are as follows.

  • Payments made in error, including cases referred by the responsible and Debt Management offices, which are repaid by the CT Unit Cumbernauld
  • Repayment claims received in respect of group payment periods that are open or closed, which are dealt with by the Group Payment Teams in the Accounts Office at Cumbernauld. Note that a closed group payment period is one where a tax charge is held on each participating company’s linked AP and the Group Payment Team are awaiting or dealing with the allocation of the payments held on the Group Payment Record.
  • Repayment is being made from an AP that is under enquiry. In these circumstances, the amount to be repaid is reallocated into the OAS account and repayment is made by the CT Unit Cumbernauld. See COM125064 for more details.
  • Claims for tax credits before the normal due date (Word 49kb) (NDD) where a charge also exists. District set off (DSET) postings of specific amounts should be reallocated to the OAS account and you should use form CT251 to ask the CT Unit Cumbernauld to make the repayment.

Function DIRR

All other repayments of CT should:

  • always be made using function DIRR (Direct Repayment), except on specific instructions from Head Office. Contact the Business Helpdesk (This content has been withheld because of exemptions in the Freedom of Information Act 2000) to request authority to make a manual repayment, but see COM125020 and COM124000 for information about large repayments
  • wherever possible, be made to the recipient’s bank or building society account, using Bacs, unless the repayment to debit or credit card conditions are met.

Repayment by Bacs is faster, more secure and cheaper than issuing payable orders. Where no Bacs details are available, you should contact the company to explain the benefits of Bacs and get these details.

You can only accept Bacs details on 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 authorisaed agent from a known and trusted email address.
  • A fax on company headed notepaper or on the authorised agent’s headed notepaper from a known and trusted fax number.

Whenever the company or agent lets you know its bank account details, you should use function BOND (Bank and / or Nominee Details) to record them on the COTAX record.

CHAPS (Clearing House Automated Payment System) should only be used in exceptional circumstances and you must request authority from Head Office to make a CHAPS repayment.

If, exceptionally, a company cannot receive a repayment by Bacs or payable order because it does not have a bank account, contact the COTAX Business HelpDesk (This content has been withheld because of exemptions in the Freedom of Information Act 2000) for assistance.

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Overpayment work lists

Overpayments, including repayments that COTAX cannot handle automatically, are entered on one of the following work lists.

  • ORUR (Overpayments Requiring Urgent Review).
  • LOPD (Overpayments List).
  • LOPU (Overpayments Review List).

Cases displayed on ORUR are normally repaid automatically 14 days after the entry date unless:

  • another ORUR condition arises during the 14 day period, in which case ORUR is updated with the new reason for entry and the 14 day period restarts from the new entry date
  • the reason for entry on ORUR is ‘Repayment stopped using function SREP (Stop Repayment)’, when the case remains on ORUR unless a condition already exists or arises which leads to its entry on LOPD or LOPU
  • LOPD or LOPU conditions exist, when the case is transferred to either LOPD or LOPU from ORUR when the 14 day period expires.

When a case appears on LOPD or LOPU you must review the reason for entry and deal with the overpayment.

See COM126000 for more information about these work lists.