Repayments: repayment supplement: introduction
Repayment supplement (RPS) arises in SA when an overpayment for RPS purposes is repaid or reallocated.
Calculation of RPS for automatic repayments and reallocations
Following capture of the SA return the majority of repayments will, where repayment is claimed, be generated automatically. The calculation and payment of RPS for these repayments will also be automatic.
In SA, repayments are only made at the taxpayers request and so any overpayments are held on the taxpayers account until they are claimed or reallocated. RPS is calculated when the repayment or reallocation takes place.
Note: There was a change to the way that the system dealt with reallocations from 28t h January 2000.
- Prior to 28th January 2000, when an overpaid amount was reallocated, RPS was calculated from the effective date of payment (EDP) to the later of the relevant due date (RDD) of the charge and the date of reallocation.
This meant that where reallocation took place after the RDD, the taxpayer was given RPS and was also charged interest for any common period running from the later of the RDD or EDP to the date of reallocation.
Further information about dealing with ‘common period’ cases is provided in subject ‘Repayment Supplement / Interest Charges (SAM111030)
- From 28th January 2000, where an overpaid amount is re-allocated, the system uses the effective date of payment (EDP) for calculation of RPS and so RPS will only be given if the taxpayer makes payment earlier than the Relevant due date (RDD) of the charge
- The amount on which RPS has been calculated can be identified using function VIEW STATEMENT
Details of the dates from which RPS is payable for certain payments and credits is provided in the subject ‘Effective Dates of Payment’ (SAM110070) (Set-offs / reallocations, repayments and RPS).
Calculation of RPS for non-automatic repayments and reallocations
Where function ISSUE REPAYMENT FROM OVERPAID BALANCE is used to make a repayment, RPS if applicable, will be calculated automatically.
RPS will need to be calculated clerically on repayments / reallocations handled through OAS following the use of
- Function TRANSFER FROM OVERPAID BALANCE
- Function TRANSFER FROM TAXPAYER CREDIT
The office using one of the transfer functions will need to notify disposal instructions to the relevant Banking Operations office by completing form SA331 (available for completion and printing from SEES) to enable them to calculate and repay any RPS due.
Repayments of RPS handled through OAS will be subject to existing clerical and supervisory procedures at each Banking Operations office. See section ‘Issue Repayment’ in this business area and the Debt Management & Banking Manual (DMBM).
If function CLERICAL REALLOCATION is used to reallocate credits then the RPS consequences will need to be considered and dealt with clerically.
Where function CREATE FREESTANDING CREDIT is used any RPS that is due for the period prior to the credit being entered on the SA record will need to be
- Calculated manually
- Included in the total amount of the freestanding credit entered on the SA record
Further information about creating a freestanding credit is provided in subject ‘Freestanding Credits’ (SAM110080)
Details of the dates from which RPS is payable on certain payments and credits is provided in the subject ‘Effective Dates of Payment’ (SAM110070) (Set-offs / reallocations, repayments and RPS).
IRIS function SARI
IRIS function SARI (Self Assessment Repayment Interest) will enable you to
- Calculate RPS manually
- Deal with enquiries from taxpayers and agents about the basis of calculation of RPS
- Produce a screen print of the calculation which can then be sent to the taxpayer or agent
Note: You may find minor differences between the amount of RPS produced automatically by the SA system and that calculated by SARI. The calculation produced by SARI is correct. However, no attempt should be made to adjust the figure generated by the SA system.
More detailed advice about how to use function SARI is provided in the IRIS User Guide.