COM126081 - Repayments / reallocations: repayment / reallocations work lists: overpayments review list (LOPU) (Action Guide)
To deal with cases on the Overpayments Review List (LOPU) in the CT Unit Cumbernauld or Debt Management office consider steps 1 - 27 below. The guide is presented as follows.
| Action | Stage |
|---|---|
Step 1 |
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Steps 2 - 4 |
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Step 5 |
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Steps 6 - 7 |
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Step 8 |
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Step 9 |
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Steps 10 - 13 |
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Steps 14 - 15 |
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Overpayment is for £100 or less and Bacs details are not held on COTAX |
Steps 16 - 18 |
Step 19 |
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Steps 20 - 26 |
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Step 27 |
Initial action
1. Use function LOPU (Overpayments Review Work List) to display the work list and select the entry that you want to work. Use the view button to see all the available details for the case including the reason for entry on the list.
Establishing why the case is on the work list
2. You need to determine all the reasons why the case is on the list. The reason shown may reflect why the case was originally put onto the list and may not reflect any subsequent changes.
Use the [Options] button to access the following functions on the overpaid AP:
-
VPPD (View Payment and Posting Details) to check if:
- the pursuit status for the AP is LA-ENF (Word 23kb) or RFI (Word 27kb)
- the pursuit status for the AP is LA-ENF (Word 23kb) or RFI (Word 27kb)
- the pursuit status for the company is RFI
- there is a manual remission (posting type ‘RMM’) (including class 10)
- the overpayment is £100 or less and Bacs details are not held on COTAX. You can see any bank details held for the company in function VTPR (View Taxpayers Record)
- DAPD (Display AP Details) to check if the clerical interest indicator (CII (Word27.5kb)) is set
3. Use the [Options] button to access the following functions on the targeted AP:
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VPPD (View Payment and Posting Details) to check if:
- the pursuit status is LA-ENF or RFI
- there is a manual remission (posting type ‘RMM’)
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DAPD (Display AP Details) to check if the:
- clerical interest indicator (CII) is set
- repayment inhibited - automatic signal is set
4. Use the [Options] button to access function VTPR (View Taxpayer) to check:
- the solvency status (Word 33kb) of the company
- COTAX notes. Specifically look for any note where Risk and Intelligence Service (RIS) have identified a risk. In these cases you should follow the instructions in the note
Repayment inhibited signal set by COTAX
5. When COTAX has set the ‘repayment inhibited - automatic’ signal for 14 days only and you need to inhibit the repayment for longer, use function RAPP (Revise AP Pursuit) to set the ‘inhibit repayment only’ and ‘inhibit reallocation and repayment’ signals for the AP and function NOTE (Case Notes) to say why you have done so.
Manual remission present
6. If there is a manual (not automatic) remission posting that was not entered by HMRC Payments, arrange for the remission to be cancelled by the office that created it. Where a balance remains outstanding, ask for a new remission to be posted for that amount.
7. If there is a manual (not automatic) remission posting that was entered by HMRC Payments, use function RREM (Record Remission) to cancel the remission. Where a balance remains outstanding, use function RREM again to remit it.
LA - Enforcement proceeding cases
8. If another AP is underpaid and the LA-ENF signal is set, contact the Debt Management office responsible for the case before taking any action to clear the overpayment.
Clerical interest cases
9. In clerical interest cases where the CII is set and there is a carry-back posting on the record (posting type ‘LOS’), review the interest position and in all cases:
- raise the correct interest charge using function RMIC (Raise Manual Interest Charge)
- advise the responsible office that the interest position is now correct and that it can proceed with the repayment of the overpaid tax
Stranded payment
10. Use function VPPD (View Payment and Posting Details) summary and payments and postings screens to find any outstanding COTAX liabilities for the company against which you can allocate the payment.
11. If you find outstanding COTAX liability or an overdue AP, use function REAW (Direct Reallocation Within COTAX) to reallocate the payment to the correct AP.
If you reallocate to an overdue AP for which there is no charge, use function RAPP (Revise AP Pursuit) to inhibit automatic repayment and reallocation on the receiving AP first.
12. If you cannot find a COTAX AP against which to allocate the payment, review the payslip and any associate papers received with the payment.
13. If the payslip or correspondence shows that the payment has been allocated to the wrong company record:
- use function TRCT (Trace Taxpayer) to find the correct COTAX reference
- use function REAW (Direct Reallocation Within COTAX), option 02, to reallocate the payment to the correct company reference. The case is automatically deleted when the payment is reallocated
- if appropriate, write to the companies to explain the actions you have taken
Company is insolvent
14. If the amount is £10 or less and it is an insolvency case:
- check for a request for this amount to be refunded. If so, go to step 27
- check for any other outstanding liability. If so, go to step 27
- otherwise, reallocate to permanent overpayment (POP). You can do this by using function REAO (Direct Reallocation Out of COTAX) to put the overpayment into OAS Class 5 permanent overpayments (Word 28.5kb). See COM120100 for more information
15. If the amount is more than £10 and it is an insolvency case, refer it to ICHU, who will let you know whether a repayment can be made. See INS6104 for further guidance.
A repayment may be made to a company or the administrator where it is in administration, but must only be made to the liquidator where it is in liquidation.
Overpayment is for £100 or less and Bacs details are not held on COTAX
16. If the amount overpaid is for £100 or less and Bacs details are not held on COTAX:
- use function VPPD (View Payments and Postings Details) summary and payments and postings screens
- find any outstanding COTAX liability or future AP for this company against which you can allocate the payment
- use function REAW (Direct Reallocation Within COTAX) to reallocate the payment to the AP
If you reallocate to an overdue AP for which there is no charge, use function RAPP (Revise AP Pursuit) to inhibit automatic repayment and reallocation on the receiving AP first.
17. If you cannot find an AP against which to make a reallocation, contact the company and try and obtain bank details so that the repayment can be made by Bacs.
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 authorised agent from a known and trusted email address
- a telephone call where the details provided are for either the company's or its authorised agent’s account and have been successfully verified using BARS
If you need access to the BARS system, ask your manager to assign the “BARS Front End Tool User” role to you in the HMRC AppStore.
18. Use function BOND (Bank and Nominee Details) to update the COTAX record with the Bacs details and ask the responsible office to arrange for a repayment to be made.
You cannot establish the reason for the overpayment
19. If you cannot establish the reason for the overpayment:
- obtain the payment details to ensure that the payment was not allocated in error or
- contact the company to establish the correct allocation
If there is likely to be any delay after the 14 days period of automatic repayment inhibit, use function RAPP (Revise AP Pursuit) to set the ‘inhibit reallocation’ or ‘inhibit reallocation and repayment’ signals and use function NOTE (Case Note) to say why you have done so.
Ceased / struck off cases
20 When a ceased case appears on LOPU you must use function VTPR (View Taxpayer Records) to check if the company is a UK incorporated company or not:
- where it is a UK incorporated company go to step 21
- where it is not a UK incorporated company or is an unincorporated association go to step 26
21. If a UK incorporated company has been struck off, the following must be released as bona vacantia after set-off has been considered:
- any unallocated payment made before the date of striking off
- any overpayment.If the payment was made before the date of striking off, go to step 22
If it was made after the date of striking off, go to step 25.
22. Use:
- function VPPD (View Payments & Postings Details) to check all the AP records for any outstanding liabilities
- function REWD (Direct Reallocation Within COTAX) to reallocate part or all of the overpayment to an AP(s) with an outstanding liability
Where there are no outstanding CT liabilities, check other heads of duty for outstanding liabilities:
- where there are outstanding liabilities under another head of duty, go to step 23
- where there are no other outstanding liabilities, go to step 24
23. To reallocate the overpayment to another head of duty, use:
- function REOD (Direct Reallocation Out of COTAX - District) class 1 - hold for reallocation
- if outside the Corporate Finance, complete Intelligent Payment Processing (IPP) Single Form giving instructions on where the overpayment should be reallocated
- within Corporate Finance, arrange for the overpayment to be reallocated from OAS to the correct head of duty
24. Where there are no outstanding liabilities on COTAX or any other head of duty you should use:
- function REOD (Direct Reallocation out of COTAX) Class 1 - hold for reallocation
- if outside of Corporate Finance – Complete the Intelligent Payment Processing (IPP) Single Form to make the transfer to the appropriate Bona Vacantia recipient.
- within Corporate Finance, arrange for the overpayment to be transferred to the appropriate Bona Vacantia recipient.
- where the overpayment is £250,000 or more, ensure an R49 check is carried out and the Intelligent Payment Processing (IPP) Single Form is filled out appropriately
25. Where an unallocated payment was made after the date the company was dissolved, it is not Bona Vacantia as it was not an asset of the company immediately prior to dissolution.
If the payment was made because HMRC has pursued a debt after the date of dissolution, you must send it back to the person who made it with a covering letter. See the Bona Vacantia Guide at BVG 1050 for more information.
If the payment was made voluntarily without any pursuit by HMRC, use:
- function VPPD (View Payments and Postings Details) to check all the AP records for any outstanding liabilities
- function REWD (Direct Reallocation Within COTAX) to reallocate part or all of the overpayment to an AP or APs with an outstanding liability
Where there are no outstanding CT liabilities, check other heads of duty for outstanding liabilities.
Where there are outstanding liabilities under another head of duty, go to step 23.
Where there are no outstanding liabilities under another head of duty, send the payment back to the sender. If any amount cannot be returned, use function REOD (Direct Reallocation Out of COTAX - District) to reallocate the overpayment into OAS Class 5 permanent overpayments (Word 28.5kb).
26. If a non UK incorporated company or unincorporated association has been struck off / ceased you must use:
- function VPPD (View Payments & Postings Details) to check all the AP records for any outstanding liabilities
- function REWD (Direct Reallocation Within COTAX) to reallocate part or all of the overpayment to an AP or APs with an outstanding liability
- function DREP (Direct Repayment) to repay an overpayment where no outstanding liabilities exist
Where you cannot reallocate and / or repay an overpayment, you must use REOD (Direct Reallocation Out of COTAX - District) to reallocate the overpayment to permanent overpayment (POP) in OAS Class 5 permanent overpayments (Word 28.5kb).
Clearing the overpayment
27. Once you know the correct allocation of the overpayment use function:
- REAO (Reallocation Out Of COTAX) if the overpayment is to be reallocated to OAS. See COM120100 for more information
- REAW (Reallocation Within COTAX) if the overpayment is to be reallocated to an outstanding liability within COTAX. See COM120100 for more information
- DREP (Direct Repayment) to repay the overpayment.
Function DREP should only be used when the payment was made in error
When the overpayment has been cleared the case is automatically deleted from the work list.