Interest: interest on late payments: clerical interest
There are a number of reasons why interest may have to be calculated clerically. The main ones are listed below
- the accounting postings on a customer record are complicated and the computer system is unable to correctly apply the automatic interest calculation rules
- following a serious objection to a previous interest charge a signal can be set on the customer record to prevent the automatic calculation and issue of an interest charge notification
- a decision has been made to remit part or all of an interest charge and a signal is set to prevent any automatic re-calculation of the interest which could re-instate the remitted interest and give cause for future complaints
- where recovery proceedings are commenced and interest is calculated on the main duty to the date of proceedings, if interest is not to be calculated to the final date of payment a signal must be set on the record to prevent any future automatic calculation
- for the paper records that were cut-over from the Network Units to the SAFE computer system only the net amount outstanding at the time of cut-over was set up on SAFE. A clerical interest signal was set on any interest-bearing record to ensure that the interest position is fully considered when a cut-over record is cleared. This will require reference back to the archived paper records to pick up details of the original charge and any previous payments
The Department’s main Head of Duty systems have been developed over a period of time and each system has a different process for setting a clerical interest signal and managing how these cases are notified to the user for review. Generally the clerical interest signal can be set at customer level so that for all charges the interest position has to be reviewed clerically, or can be set at charge level when only that specific charge is affected. DMBM402000 will in due course be revised to provide the detailed processes for dealing with clerical interest cases and raising interest charges for each Head of Duty system.