COM128030 - Repayments / reallocations: repayment interest: automatic calculation of RPI - reallocations
When an overpayment arises and is to be reallocated and all the following apply
- Certain conditions (Word 40KB) exist on the overpaid AP
- There is an outstanding liability on one of more other APs
- No conditions exist on the COTAX record to prevent an automatic reallocation being made. For more information on this subject see section ‘Inhibit Automatic Process’ COM120030
COTAX will
- Calculate any repayment interest (RPI) due to the date of the reallocation
- Make the reallocation automatically
COTAX will automatically calculate if any RPI is due and determine the EDP (Word 41KB) to apply to the reallocation on the receiving AP by
- Comparing the normal due date (Word 49KB) of the overpaid AP with the normal due date of the receiving AP
And
- Then use the common period (Word 29KB) rules
The following table provides some examples
| Situation | Result |
|---|---|
| When the normal due date of the receiving AP is the same or earlier than the normal due date of the overpaid AP | COTAX will not add any RPI. The EDP of the reallocation posting on the receiving AP will be the same as the EDP of the original posting on the overpaid AP |
| When the normal due date of the receiving AP is later than that of the overpaid AP, but earlier than the date of reallocation | For a payment with an EDP earlier than the normal due date of the receiving AP. RPI will be calculated up to the normal due date of the receiving AP. The EDP of the reallocation posting on the receiving AP will be the normal due date of the receiving AP |
| For a payment made on or after the normal due date of the receiving AP | No RPI will be added The EDP of the reallocation posting on the receiving AP will be the same as the EDP of the original posting on the overpaid AP |
| When the normal due date of the receiving AP is later than that of the overpaid AP, and later than the date of reallocation | RPI will be added to the date of the reallocation The EDP of the reallocation on the receiving AP will be the date of the reallocation |
Notes:
1. When repayment interest is reallocated the EDP of the posting on the receiving AP will always be the date of the reallocation
(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)
For legislation applying to this subject, see COM128013