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HMRC internal manual

COTAX Manual

From
HM Revenue & Customs
Updated
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Interest: interest objections and amendments: considering a credit or debit interest objection (Action Guide)

To deal with a credit or debit interest objection in a Debt Management Office or in Banking Operations, follow steps 1 - 33 below.

Note: You must maintain correctly charged credit or debit 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
Claim for an earlier EDP Steps 3 - 8
Payment incorrectly allocated Steps 9 - 10
Tax charge decreased Steps 11 - 14
Claim that not all payments included in interest calculation Step 15 - 21
Quarterly instalment signal set incorrectly Step 22 - 28
Interest charge below £100.00 (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
Interest charge correct Step 31 - 32
Interest charge is incorrect Step 33

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 at all, advise the company that this does not constitute a valid objection. The 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 instalment due date. Go to step 31.
   

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Return still outstanding

2. If the company states that the return is still outstanding and a revenue determination has been made, advise the company that the credit interest and debit interest charge is correctly due and payable on the tax that has been charged. Go to step 31.
   

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Claim for an earlier EDP

3. 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 on Function VPPD (View Payments and Postings Details) by selecting the posting and clicking on the [OK] button.
   
4. 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 credit or debit interest charge is correctly due and payable. Go to step 31.
5. Where the posting type is:
  * BGP (bank giro)
  * BAC (direct credit )
  * NGP (national giro)
  * 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 to the correct date. Go to step 33.
6. Where the posting type is:
  * IRP (Inland Revenue payable order)
  * DSO (district set-off)
  * LOP (local office payment),
  check with Banking Operations 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 step 33.
7. 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 step 33.
8. Where the correct EDP has been given to the payment, advise the company that the credit or debit interest charge is correctly due and payable. Go to step 31.

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Payment incorrectly allocated

9. 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 and go to step 33.
   
10. If the company’s record is correct, explain that the payment allocation is correct and that the credit or debit interest charge is correctly due and payable. Go to step 31.

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Tax charge decreased

11. Use Function DINT (Display Interest Computation) to find out how the credit or debit interest has been calculated. Take screen prints if necessary as you need to check this against VPPD (View Payment and Postings Details).
   
12. Use Function VPPD (View Payments and Postings Details) postings screen to find out what the revised tax charge is. A reduction in the tax charge will have amended the amounts due for each quarterly instalment.
13. Check that credit or debit interest has been calculated on the correct tax charge and instalment amounts.
14. If the credit or debit interest has not been calculated on the revised tax charge and instalment amounts go to step 33.

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Claim that not all payments included in interest calculation

15. Use Function DINT (Display Interest Computation) to find out how the credit or debit interest has been calculated. Take screen prints if necessary as you need to check this against VPPD (View Payments and Postings Details) postings screen.
   
16. Use Function VPPD (View Payments and Postings Details) postings screen to check the payments made against the AP.
17. Compare the interest calculation with the payments made.
18. Where payments have been transferred out to:
  * OAS, COTAX may not have included these in the calculation. See COM80080 for more information.
  * another AP or Company, common period rules have been applied by COTAX.
19. Where payments have been transferred in and:
  * credit or debit interest had been calculated before the transfer
  * the credit / debit interest indicator is set to ‘Y’,
  interest may not have been recalculated to take these payments into account.
20. Check the credit or debit calculation has been calculated on the payments that should be included in the calculation. Be careful to apply common period rules. Flow charts on how to apply the rules are available on the CT Process intranet site under the ‘Others’ category of ‘Frequently Asked Questions.
21. If the credit or debit interest charge is incorrect go to step 33.

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Quarterly instalment signal set incorrectly

22. Check Function DRTN (Display Return) to see if box 79 has been completed.
   
23. Check Function DAPD (Display AP Details) Enquiry and Other Details to find out if the quarterly instalment payment (QIP) signal is set to ‘N’ or ‘Y’.
24. Contact the caseworker with these details and ask him to confirm the correct signal for the AP.
25. Where the signal is incorrect make sure that the caseworker corrects it.
26. If the credit / debit interest indicator (CDII) is not set then COTAX automatically recalculates the credit or debit interest.
27. If the credit / debit interest indicator (CDII) is set, go to step 33.
28. Where the quarterly instalment payment (QIP) signal has been set correctly, the credit or debit interest charge is correctly due and payable. Go to step 31.

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Interest charge below £100.00

(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) 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) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

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Interest charge correct

31. If the interest is correct:
   
  * send a letter of explanation to the company
  * use Function RAPP (Revise AP Pursuit) to cancel RFI.
32. Continue with collection
  (This content has been withheld because of exemptions in the Freedom of Information Act 2000)  

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Interest charge is incorrect

33. If the credit or debit interest is incorrect, you must amend it. See the Action Guides at COM80084 for more information on how to do this.