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HMRC internal manual

COTAX Manual

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HM Revenue & Customs
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Interest: interest objections and amendments: considering a late payment interest objection (Action Guide)

To deal with a late payment interest objection in a Debt Management Office or in Banking Operations, follow steps 1 - 22 below.

You must maintain correctly charged late payment interest even for a difficult case.

The guide is presented as follows.

Notice to deliver not received or received late Step 1
   
Return still outstanding Step 2
DTR or loss carry back Steps 3 - 4
Claim for an earlier EDP Steps 5 - 10
Payment incorrectly allocated Steps 11 - 12
Tax charge decreased Steps 13 - 15
Section 458 relief Steps 16 - 18
Interest charge below £100.00 (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
Interest charge correct Step 21
Interest charge incorrect Step 22

Notice to deliver not received or received late

  1.  If a company objects on the grounds that the notice to deliver was received late or not received at all, advise the company that this does not constitute a valid objection. The late payment interest is correctly due and payable. The legal requirement of a notice to deliver is that the company deliver a return. Payment should therefore always be made by the due date (Word 49KB)

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Return still outstanding

  1.  If the company states that the return is still outstanding, advise the company that the late payment interest charge is correctly due and payable and remind it of the penalties that will be charged if it fails to deliver the return or returns by the filing date (Word 42KB).

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DTR or loss carry back

  1.  If late payment interest has been calculated to a future date on a DTR (Double Taxation Relief) or loss carry-back:
  • check that the interest has been correctly calculated
  • explain to the company how the EDP for loss carry-backs and DTR is calculated.
  1.  If the company continues to press the objection, contact the COTAX Business Helpdesk (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

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Claim for an earlier EDP

  1.  If the company states that a payment was made earlier than the date recorded on the AP, check the posting type (Word 73KB) on the postings screen in Function VPPD (View Payments and Postings Details) by selecting the posting and clicking on the [OK] button.

  2.  Where the posting type is BLP (payment made by cheque), advise the company that the payment was not received until the date posted on the record and that the late payment interest charge is correctly due and payable. Go to step 21.

  3.  Where the posting type is BGP (bank giro), BAC (direct credit), NGP (national giro) or BGT (bank giro or CHAPS), check with Banking Operations Shipley for any delays in payments being processed and posted to the AP. If there have been any delays use function AEDP (Amend Effective Date of Payment) to amend the EDP. Go to COM80034 and follow the appropriate action guide.

  4.  Where the posting type is IRP (Inland Revenue payable order), DSO (district set-off) or LOP (local office payment), check with Shipley that the correct EDP has been given. If an incorrect EDP has been posted, use function AEDP (Amend Effective Date of Payment) to amend the EDP. Go to COM80034 and follow the appropriate action guide.

  5.  Where the posting type is RFR (reallocate from), check that the correct EDP has been given to the reallocation. If an incorrect EDP has been posted, use Function AEDP (Amend Effective Date of Payment) to amend the EDP. Go to COM80034 and follow the appropriate action guide.

  6.  Where the correct EDP has been given to the payment, advise the company that the late payment interest charge is correctly due and payable. Go to step 21.

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Payment incorrectly allocated

  1.  Use function VPPD (View Payment and Postings Details) postings screen to check that payments have been correctly allocated to the company’s record. Where payments have been misallocated correct the record. Go to COM80034 and follow the appropriate action guide.

  2.  If the company’s record is correct, explain that the payment allocation is correct and that the late payment interest charge is correctly due and payable. Go to step 21.

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Tax charge decreased

  1.  Use function VPPD (View Payments and Postings Details) to find out what the revised tax charge is.

  2.  Use function DINT (Display Interest Computation) to see if late payment interest has been correctly calculated on the correct tax charge.

  3.  If the late payment interest has not been calculated on the revised tax charge go to COM80034 and follow the appropriate action guide.

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Section 458 relief

  1.  Confirm with the responsible office that the correct date for S458 CTA 2010 relief has been given on CT250(P).

  2.  If the incorrect date was supplied go to COM80034 and follow the appropriate action guide.

  3.  If the correct date has been given then explain to the company how the EDP for S458 CTA 2010 is calculated and advise that the late payment interest is correctly due and payable. Go to step 21.

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Interest charge below £100.00

  1.  (This content has been withheld because of exemptions in the Freedom of Information Act 2000) COM82020(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) In these cases complete form AOC407 in Cumbernauld or AOSREM in Shipley, Request For Remission Under £100.00 and pass to the authorising officer with the papers.

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Interest charge correct

  1.  If the interest is correct:
  • send a letter of explanation to the company
  • use function RAPP (Revise AP Pursuit) to cancel RFI
  • continue with collection.

You do not need to do this where, for example, the outstanding amount is below the administrative limit.

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Interest charge incorrect

  1.  If the late payment interest is incorrect, you must amend it. For more information on how to do this go to COM80034 and follow the appropriate action guide.