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HMRC internal manual

COTAX Manual

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HM Revenue & Customs
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Repayments / reallocations: repayment / reallocations work lists: overpayments list (LOPD) (Action Guide)

To deal with cases on the Overpayments List in the responsible office consider steps 1 - 59 below. The guide is presented as follows.

Initial action Step 1
Establishing why the case is on the work list Step 2
The overpaid or targeted AP has an informal discharge Steps 3 - 7
Inhibit reallocation signal is set, taxpayer reallocation/repayment inhibit set or manual inhibition set Steps 8 - 13
No agreed assessment Step 14
Tax or penalty under appeal or penalty or tax informally stood over Step 15
RLS signal is set Step 16
Earlier or later AP due - no tax charge Steps 17 - 23
Reallocation/repayment signal set joint notice Step 24
Enquiry in progress for this or another AP Step 25
No self assessment for the AP Step 26
Revenue determination automatically stood over Step 27
QP is Y/P for next AP. Instalment may be due Steps 28 - 35
Participator, GPP status is not cleared Step 36
Group participator overpayment Steps 37 - 41
Earlier AP repayment claimed on return Step 42
Repayment cancelled Step 43
Small overpayment - no auto reallocation Steps 44 - 49
Ceased / struck off cases Steps 50 - 57
Overpayment is for £20 or less and Bacs details are not held on COTAX Steps 58 - 59
Welsh language case Steps 60 - 65

Important

In any case where you decide to make a repayment you should always check that Bacs details have been received and recorded by viewing function VTPR (View Taxpayer Record). Where they haven’t and you have already been in contact with the company about the overpayment you should ask them for bank details so that the repayment can be made by Bacs. You can only accept bank 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 fax on company headed notepaper or its authorised agent’s headed notepaper from a known and trusted fax number.

When you receive the details you should use function BOND (Bank and / or Nominee Details) and update COTAX with the details.

However, if the last payment on the most recent AP included in a repayment was made by debit or credit card and the repayment falls within the rules for repayment to card, COTAX will overrule any direction you have given it to repay through Bacs or to a nominee. The repayment will be made to card and you must not try to make the payment any other way.

Initial action

  1.  Use function LOPD (Overpayments List) to display the work list and select the entry you want to work. If the Welsh language signal is set on the case, follow the appropriate steps below then go to step 60.

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Establishing why the case is on the work list

  1.  Select the [View] button to see all available details for the case including the reason for entry onto the list and if the small repayment (Word 29.5kb) limit field is set to ‘Y’. The reason shown may reflect why the case was originally put onto the list and may not reflect any subsequent changes.

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The overpaid or targeted AP has an informal discharge

  1.  Find out if the amount of tax which has been informally discharged has been included in an investigation settlement.

  2.  If the amount of tax that was informally discharged has been included in an investigation settlement and you want to repay the overpayment:

  • use function RINF (Record Informal Discharge) to cancel the informal discharge
  • use function DIRR (‘Repay a specific amount’ option) to make the repayment
  • use function RINF again to reinstate the informal discharge.
  1.  If the amount of tax that was informally discharged has been included in an investigation settlement and you want to reallocate the overpayment to another COTAX record:
  • use function RINF to cancel the informal discharge
  • use function REOD to reallocate the overpayment to OAS
  • on the same day send a fully completed form CT251 giving allocation details to the CT Unit in Cumbernauld. See COM120100 for guidance on completing the CT251.
  • use function RINF again to reinstate the informal discharge.
  1.  If you want to reallocate the overpayment to the investigation settlement:
  • use function RINF to cancel the informal discharge
  • use function REOD to reallocate the overpayment to OAS
  • on the same day send a fully completed form CT251 giving allocation details to the CT Unit in Cumbernauld
  • use function RINF again to reinstate the informal discharge.

The case is automatically deleted from the work list when the overpayment has been cleared.

7. If the amount of tax that was informally discharged has not been included in an investigation settlement, use function RINF to cancel the informal discharge. The overpayment is automatically repaid or reallocated and the case is automatically deleted from the work list when the reallocation or repayment has taken place.

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Inhibit reallocation signal is set, taxpayer reallocation/repayment inhibit set or manual inhibition set

If the Welsh language signal is set, go to step 60.

  1.  Review the COTAX record to see why the signals were set in function MAPS (Maintain AP Signals) or function MRSC (Maintain Repay / Realloc Signals (Company)). It is important to establish who set a manual inhibit and why so that a repayment is not made inappropriately.

COTAX automatically sets the ‘inhibit reallocations and repayments’ signal if the ‘more than one return’ box was entered on the return. This is to prevent an incorrect repayment/reallocation when the first return is processed on COTAX.

  1.  Use function VTPR (View Taxpayers Record) and check for any 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.

10. Ensure that all returns have been processed onto COTAX.

11. Decide whether the signal can now be unset. You may need to check with the Debt Management office and the CT Unit in Cumbernauld if COTAX notes indicate that they have an interest in the case.

12. Unset the signal as appropriate using either function MAPS or function MRSC. The overpayment is automatically repaid or reallocated and the case is automatically deleted from the work list when the reallocation or repayment has taken place.

13. If the inhibition is still required, use function LOPD to B/F the case and enter a suitable B/F note.

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No agreed assessment

14. Use function LOPD to refer the case to a Technical Caseworker, B/F the case and enter a suitable B/F note.

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Tax or penalty under appeal or penalty or tax informally stood over

15. Use function LOPD to refer the case to the CT Co-ordinator, B/F the case and enter a suitable B/F note.

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RLS signal is set

16. Take action to trace a new address and use function LOPD to B/F the case until you find a new address and clear the ‘RLS’ signal. The case is automatically deleted from the work list when the overpayment has been cleared. These cases also appear on work list RRLS (Registered Office RLS List).

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Earlier or later AP due - no tax charge

17. Automatic reallocation or repayment has not taken place because an overpayment exists on an AP and either an earlier or later AP is due or will become due within the next 14 days and there is no tax charge on that AP.

You should review the payment and posting details using function VPPD (View Payments and Posting Details).

18. If the overpayment is due to a misallocation of a payment, ask the CT Unit in Cumbernauld to reallocate the payment.

19. If the overpayment is not due to a misallocation of a payment, consider if a charge is likely to arise on the next AP.

20. If a charge is likely to arise on the next AP, reallocate the overpayment to the next AP using function REWD.

21. If the payment does not appear to be appropriate to CT, view Your Tax Account and check for any outstanding PAYE or VAT debts. Where the payment is appropriate to either PAYE or VAT use function REOD (Direct Reallocation Out Of COTAX) and send a fully completed form CT251 to the CT Unit in Cumbernauld advising them of the reallocation details. See COM120100 for guidance on completing the CT251.

22. If there is no obvious reason for the overpayment, such as credit interest or the result of an amendment, contact the company to ask them why they have made the payment and where it should be allocated to.

23. If a charge is not likely to arise on the next AP or repayment has been requested, repay the overpayment using function DIRR.

If the overpayment is £20 or less you should only repay where Bacs details are held. In all other cases you should reallocate to the next AP regardless of when it will become due.

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Reallocation/repayment signal set joint notice

24. The relevant box on the CT600 has been completed to show that the overpayment is to be held and surrendered to another company under Section 963 CTA 2010 (formerly S102 FA 89). You should:

  • refer the case to a Technical Caseworker to consider reallocating the overpayment to another company
  • use function LOPD to B/F the case and make a B/F note to showing the reason for the B/F.

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Enquiry in progress for this or another AP

25. The enquiry in progress signal has been set in function MAPS. You should:

  • refer the case to the caseworker handling the enquiry to advise them of the overpayment
  • use function LOPD to B/F the case until the enquiry is closed.

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No self assessment for the AP

26. A return has been logged but the self assessment has not been recorded. You should:

  • consider recording the self assessment or if necessary refer the case to a Technical Caseworker
  • use function LOPD to B/F the case until a self assessment is recorded.

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Revenue determination automatically stood over

27. A return has been logged for an AP for which a revenue determination has previously been made. Use function DASS (Display Assessment Details) to identify the AP with the revenue determination that has been automatically stood over.

Use:

  • function RAMA (Record / Amend Assessment) to record the self assessment, or if the self assessment cannot be recorded yet
  • function MAPS for the AP which carries the overpayment and select ‘reallocations & repayments’ from the drop down menu for the ‘manual inhibitions’ field
  • function LOPD to set a suitable B/F date.

When the self assessment is recorded you must use function MAPS and select ‘none’ from the drop down menu for the ‘manual inhibitions’ field.Top of page

QP is Y/P for next AP. Instalment may be due

28. This or the next AP has no tax charge present and the ‘quarterly instalment payment ‘ (QIP) signal is set to ‘Y’ or ‘P’. You should:

  • look at the payment history for the AP for which the overpayment arises using function VPPD
  • decide whether all or part of the overpayment is intended for the next AP.

29. If the overpayment is a misallocation, contact the CT Unit in Cumbernauld and ask them to reallocate the payment.

30. If there is no misallocation, check if the normal due date (NDD) has been reached and any credit and debit interest has been posted. Where it hasn’t, make a COTAX note and B/F the case for three days after the NDD. At the B/F date, review the case for any interest that may be due.

31. If the NDD has passed, check for arrears on earlier APs and where there are any, use function REWD to reallocate the overpayment.

32. If there are no arrears then view Your Tax Account and check for any outstanding PAYE or VAT debts. Where the payment is appropriate to either PAYE or VAT, use function REOD (Direct Reallocation Out Of COTAX) and send a fully completed form CT251 to the CT Unit in Cumbernauld advising them of the reallocation details. See COM120100 for guidance on completing the CT251.

33. If there is no obvious reason for the overpayment, such as an amendment to the charge, contact the company to ask them why they have made the payment and where it should be allocated to.

34. If a charge is not likely to arise on the next AP or repayment has been requested, repay the overpayment using function DIRR.

If the overpayment is £20 or less you should only repay where Bacs details are held. In all other cases you should reallocate to the next AP regardless of when it will become due.

35. If further guidance is required, refer the case to a Technical Caseworker.

The QIP signal set to ‘Y’ on the overpaid AP stops the overpayment being repaid automatically.

The QIP signal set to ‘P’ on the next AP stops automatic reallocation to that AP.

Overpayments can be automatically reallocated to an earlier AP if an underpayment exists.Top of page

Participator, GPP status is not cleared

36. The company is a participator in a Group Payment Arrangement and a payment has been allocated in error to a participator’s AP rather than the group payment record and the group payment period is not cleared.

Send an EForm to the Group Payment Team at Accounts Office to rectify the error.

  • Take any action as requested by the Group Payment Team.
  • B/F the case to check the case has cleared.
  • Refer the case to a Technical Caseworker where further guidance is required.

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Group participator overpayment

37. Following the apportionment of payments received for a Group Payment Arrangement, an AP has become overpaid. Before being placed on work list LOPD, COTAX calculates credit/debit interest and ensures any late payment interest and penalties are cleared.

If the resulting overpayment is solely credit interest it is repaid automatically.

38. Where the overpayment is £5000 or less check for any arrears on previous APs or if a charge is likely to arise on the next AP, reallocate the overpayment to clear the arrears first and then to the next AP using function REWD unless the AP is a GPA participator.

39. If the overpayment cannot be reallocated within CT, view Your Tax Account and check for any outstanding PAYE or VAT debts. Where the payment is appropriate to either PAYE or VAT use function REOD (Direct Reallocation Out Of COTAX) and send a fully completed form CT251 to the CT Unit in Cumbernauld advising them of the reallocation details. See COM120100 for guidance on completing the CT251.

40. If the overpayment is greater than £5000 then contact the company to confirm how the overpayment should be dealt with.

41. If an overpayment still exists either:

  • repay the overpayment using function DIRR or
  • retain the overpayment pending any expected change to the assessment or tax charge, B/F the case with a B/F note saying why.

Where you need further guidance you should refer the case to a Technical Caseworker.Top of page

Earlier AP repayment claimed on return

42. The AP is overpaid and the company has indicated on a return that a repayment is due for a previous year. You should:

  • ensure that all returns have been processed onto COTAX
  • repay or reallocate the overpayment.

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Repayment cancelled

43. The AP is overpaid because a repayment has been cancelled and the cancelled repayment inhibit (Word 53.5kb) is set to stop automatic repayment. You should:

  • find out why the repayment has been cancelled
  • refer to steps 3 - 8 at COM126071 for further guidance to clear this work list entry.

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Small overpayment - no auto reallocation

44. The AP is overpaid and the overpayment cannot be reallocated or carried forward to the next AP. You should check COTAX and the Companies House website to see if the company is struck off or dormant.

45. If the company is dormant and the overpayment is £3 or less use function REOD and put the payment into permanent overpayments (POP).

46. If the company is dormant and the overpayment is over £3 and is the result of credit interest or part of a payment made before the dormancy then check:

  • COTAX for any outstanding arrears, and where there are any use function REWD to reallocate the overpayment to clear them
  • Your Tax Account for any PAYE or VAT arrears and where there are any, use function REOD to reallocate the overpayment to OAS. Send a fully completed form CT251 to the CT unit in Cumbernauld advising them of how the overpayment should be allocated. See COM120100 for guidance on completing the CT251.

47. If the company is shown as dormant and the overpayment is over £3 and is the result of a recent payment (post dormancy), consider making the company live and allocating the payment to the first live AP.

48. If the company has been noted as struck-off go to step 50.

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Ceased / struck off cases

50. When a ceased case appears on LOPD you must use function VTPR (View Taxpayers Records) to check if the company is a UK incorporated company.

  • Where it is a UK incorporated company go to step 51.
  • Where it is not a UK incorporated company or is an unincorporated association go to step 56.

51. 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 52. If it was made after the date of striking off, go to step 55.

52. 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.

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 53.
  • Where there are no other outstanding liabilities go to step 54.

53. To reallocate the overpayment to another head of duty:

  • use function REOD (Direct Reallocation Out of COTAX - District) class 1 - hold for reallocation
  • complete and issue form CT251 to the CT Unit in Cumbernauld giving instructions on where the overpayment should be reallocated. COM120100 has guidance on completing form CT251.

54. Where there are no outstanding liabilities on COTAX or any other head of duty:

  • use function REOD (Direct Reallocation out of COTAX) Class 1 - hold for reallocation
  • complete and issue form CT251 to the CT Unit in Cumbernauld ensuring that the correct bona vacantia recipient has been completed in the ‘Bona Vacantia’ section. See BVG1040 for a list of recipients and COM120100 for guidance on completing the CT251.
  • where the overpayment is £250,000 or more ensure an R49 check is carried out and the appropriate details entered in the ‘Repayments’ section of the CT251.

55. 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 BVG1050 for more information.

If the payment was made voluntarily without any pursuit by HMRC, 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.

Where there are no outstanding CT liabilities, check other heads of duty for outstanding liabilities.

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 REOD (Direct Reallocation Out of COTAX – District) to reallocate the overpayment into OAS Class 5 permanent overpayments (Word 28.5kb).

56. If a non UK incorporated company or an 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
  • use function REWD (Direct Reallocation Within COTAX) to reallocate part or all of the overpayment to an AP(s) with an outstanding liability
  • use function DIRR (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 into OAS Class 5 permanent overpayments (Word 28.5kb).

​57. The case is automatically deleted from the work list when the overpayment has been cleared.Top of page

Overpayment is for £20 or less and Bacs details are not held on COTAX

58. If the amount overpaid is for £20 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 REWD (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.

59. If you cannot find an AP against which to make a reallocation, use function DIRR and arrange to make a repayment.

Welsh language case

  1. Where the Welsh language signal has been set to ‘W’ and / or the Registered Office address is that of the Welsh Contact Centre, check if the EiP signal is set.  If it is, go to step 25

  2. Where repayment is appropriate, see whether bank details are available. If they are, use function DIRR (Direct Repayment) to repay by Bacs. If not, go to step 62.

  3. Use function DIRR. Change the signal ‘Do you want to issue this repayment manually’ from N to Y. This processes the repayment in COTAX but does not produce a payable order. Complete the function.

  4. Go to VPPD screen COT215L and take a screenprint to show that the repayment is ‘awaiting manual issue’

  5. Use function NOTE to show that you are forwarding the screenprint and any relevant paperwork to Aled Roberts (Roberts, Aled (PT Operations Welsh Contact Centre)), at the following address:CT Section Welsh Contact CentreTy MoelwynBritannia TerracePorthmadogGwyneddLL49 9AB

He will use function MIPO to issue a Welsh payable order to the company.

  1. Make sure automatic repayments continue to be inhibited.