SAM110020 - Repayments: issue repayment: automatic repayments

Following capture of the SA return most repayments, where there is a request for repayment on the return, will be issued automatically. Clerical involvement will be required where the case is selected for authorisation or any signals are present which inhibit automatic issue.

A trust return will not produce an automatic repayment.

Automatic processing
Small overpayments
Multiple returns for same UTR captured/filed on the same day
Method of repayment
Repayment authorisation (or cancellation)
Repayment issued to incorrect taxpayer

Automatic processing

Where a repayment is requested on the SA return or structured action request, automatic processing will review the SA account for a credit balance available for repayment. To do this it will take into account the following

  • The total balance (credit or debit) on the SA record
  • Liabilities ‘becoming due’
  • Uncleared payment credits (made within last 14 days)
  • Any balancing charge from a return not yet due that is outside the ‘becoming due’ period)

If a return is captured within 45 days of a liability ‘becoming due’, for example a balancing charge debit due for the return year or a first payment on account for the following year, any amount available for repayment will be reduced by the sum required to cover the liability (or liabilities) ‘becoming due’.

An exception to this is where a return is captured and creates a balancing charge debit due, any repayment will be reduced by the sum required to cover this liability, irrespective of whether the liability is due within or outside the 45 day period.

However, if the taxpayer requests repayment of the full amount and does so before the due date of the liability, the full amount can be repaid without the need for any further formal written repayment request.

Note: The 45 day parameter may be extended prior to the June and December statement issue.

Where an amount of £10 or more is available for repayment and there are no repayment inhibitions (SAM110205) a draft repayment is created which will be subject to risk factors before issue. Repayment supplement, if due, will be calculated automatically by the SA repayment system.

Changes to the credit balance, for example where a return is unlogged, will not automatically alter a repayment once it has been created, even when the repayment status (SAM110225) is ‘draft’.

Small overpayments

Where the overpaid amount is less than £10, the SA system applies a minimum limit which will prevent the automatic issue of a repayment. The credit will remain on the taxpayer’s SA record until a liability becomes due and the credit can be allocated.

However, if the taxpayer pursues the request for repayment, no matter how small, SA function ISSUE REPAYMENT FROM OVERPAID BALANCE will be used to repay the credit balance.

Multiple returns for same UTR captured/filed on the same day

Where returns for different tax years relating to one UTR are captured or filed online on the same day, and all include repayment requests that result in a repayment, automatic repayment processing will create only one repayment based on the repayment instructions shown on the return for the earliest tax year.

This is because returns processing and automatic credit allocation has first to be completed in order to establish the tax liabilities on the SA account for the relevant years, and to ensure that any resulting balancing charges are covered by any credits before repayment processing can review the SA account for any net credit balance available for repayment.

Method of repayment

Automatic repayments from the SA return will be made by either Repayment to card, BACS or payable order. Where certain conditions are met, repayment will always be made to card, regardless of any bank account or nominee instructed by the customer. For further information, see subject ‘Repay to card’ (SAM110116).

To facilitate the use of BACS, the bank (or building society) account and / or nominee details are captured from the return.

When a repayment is created automatically from the return, the status of that repayment on the SA record will be shown immediately as Draft.

The repayment may then be selected by the SA system for manual authorisation, at which stage the status will be updated from Draft to Selected. The repayment will then appear as a work item on the W028 Repayments to be Authorised or Cancelled work list (SAM71106) for authorisation or cancellation.

When the manual authorisation is completed the status of these items will be updated to Authorised or Cancelled Selected as appropriate. If not selected for manual authorisation, the status of the repayment will automatically be updated to Authorised.

Once the status is updated to Authorised, the repayment details are forwarded automatically from the taxpayer’s record to the SA Repayment System to issue the repayment and the status at this stage will be updated to Transmitted.

Note: When the status is shown as Transmitted, the repayment will have been authorised within the last 2 days, but not yet issued. A repayment cannot be cancelled whilst the status is Transmitted.

When received by the SA Repayment System, the status of the repayment will be updated to Issued. The SA Repayment System will issue the repayment to the taxpayer within 3 days from the date the repayment is authorised.

The taxpayer should receive the repayment within 5 days of it being authorised, but this may be slightly longer for BACS repayments due to the processing undertaken by the bank / building society in order for the repayment to reach the taxpayer’s account.

If the status is shown as Rejected this indicates that it is a BACS repayment that has been rejected by the BACS system. For more information see subject ‘BACS Repayment Rejection’ (SAM110030).

A repayment with a status of Draft, Selected, Authorised or Issued can be cancelled at any one of these stages and if cancelled, the status will be updated to one of the following

  • Cancelled Draft (repayment cancelled at the Draft stage)
  • Cancelled Selected (repayment cancelled following clerical review but prior to authorisation)
  • Cancelled Authorised (repayment cancelled after authorisation but before issue)
  • Cancelled Issued (repayment cancelled after issue following instructions from HMRC Finance

This repayment process also applies to non-automatic Repayment to card, BACS and payable order repayments that have been created on-line by an operator.

Automatic repayment will not be appropriate where

  • The overpaid amount is less than £10 (excluding repayments nominated to charity)
  • Repayment is to be made from a trust record or arises from an amended return
  • There are any repayment inhibitions and even after enquiries have proved satisfactory it is agreed that repayment can proceed
  • A repayment is requested other than by the return
  • An SA repayment that has previously been cancelled using function VIEW REPAYMENT is to be re-issued
  • The method of repayment is either CHAPS or Local Office Payable Order

More detailed advice on making a repayment where any of the above circumstances apply is provided in subjects ‘Non-Automatic Repayments’ (SAM110140) and ‘Local Office Payable Orders’ (SAM110110).

Repayment authorisation (or cancellation)

All repayments with a status of Draft including those created automatically from a return, will be subject to the ‘pre-repayment risk criteria’ by the SA system and may be selected for detailed pre issue security checks followed by manual authorisation (or cancellation). Those repayments selected will be created as work items on the W028 Repayments to be Authorised or Cancelled work list (SAM71106).

Note: The ‘pre repayment risk criteria’ only covers those draft repayments to be issued by Payable Order or BACS. Repayments to be issued by CHAPS or LOPO (Local Office Payable Order) are not subject to this ‘pre repayment risk criteria’ by the SA system but continue to be subject to existing security procedures.

More information on the action to take when reviewing the work lists is available in section ‘Repayment Work Lists’ (SAM113000 onwards).

Repayment issued to incorrect taxpayer

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