COM128040 - Repayments / reallocations: repayment interest: non automatic calculation of RPI
There are occasions where an overpayment is to be repaid or reallocated and COTAX will not automatically calculate repayment interest. This is where:
- the repayment / reallocation is being made through OAS
- an earlier repayment and associated RPI has been cancelled and COTAX does not recalculate the repayment interest when repaying again
- you make a manual repayment outside the scope of COTAX
Repayment / reallocation is being made through OAS
COTAX does not automatically add repayment interest to any amount that is reallocated from a COTAX record to the OAS account using function REOD (Direct Reallocation Out of COTAX). Where you move money into OAS to be repaid or reallocated you must always complete Intelligent Payment Processing (IPP) Single Form and sent it to the Corporate Finance. They are responsible for calculating and repaying / reallocating any repayment interest that may be due.
Cancelled repayment and RPI needs to be recalculated
There are occasions where, if the repayment and associated repayment interest is cancelled, COTAX will not recalculate the repayment interest correctly when repaying again. In these cases you need to calculate the repayment interest using function RINT (Repayment Interest Calculation) and post the repayment interest on to the COTAX record using function DSET (District Set-OFF) - code 50881.
Manual repayments
Where you make a manual repayment outside the scope of COTAX, the repayments are not recorded anywhere on the COTAX record, and where repayment interest is appropriate, you should calculate the repayment interest using function RINT and include it in the repayment and on the Payable Order Request Form (PORF) you send to DMB. If the repayment interest is not to be repaid alongside the overpayment you can set it against a CT charge in COTAX by using Function DSET and code 50881.
Where you make a manual repayment that is within the scope of COTAX (for example, COTAX overpayments over (This content has been withheld because of exemptions in the Freedom of Information Act 2000) and no Bacs details held), COTAX automatically includes any repayment interest that is due up until the date the repayment was created on COTAX and posts it on the record. Once you enter the repayment issue date in function MIPO (Manual Issue Payable Order) which is later than the repayment date displayed in function VPPD (View Postings and Details), then COTAX calculates and automatically issue a payable order for the additional repayment interest that is due.
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