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HMRC internal manual

Self Assessment Manual

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HM Revenue & Customs
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Repayments: repayment supplement: repayment supplement / interest charges

‘Common Period’

RPS and late payment interest (LPI) charges can arise in the same period, for example where the reallocation of a qualifying overpayment for RPS purposes takes place after the relevant due date of the charge to which it is being reallocated. This overlapping period is called the ‘common period’ and only applies where RPS and LPI charges apply to the same UTR. The ‘common period’ rules do not apply to set-offs / reallocations from one UTR to another or to a charge under another head of duty.

  • Prior to 28th January 2000, when an overpaid amount was set-off / reallocated, RPS was calculated from the effective date of payment (EDP) to the later of the relevant due date (RDD) of the charge against which it was being set and the date of reallocation.

Where reallocation took place after the RDD, the taxpayer was given RPS and charged late payment interest for the same period which ran from the later of the RDD or EDP, to the date of reallocation.

As a consequence, both RPS and late payment interest arose for the ‘common period’ which was from the later of the relevant due date and the EDP, to the date of reallocation.

However, in some cases this disadvantaged the taxpayer. Therefore

  • From 28th January 2000, where an overpaid amount is set-off / reallocated within the same UTR, the system will use the effective date of payment (EDP) of the credit as the start of the calculation of RPS. But the relevant due date (RDD) of the charge against which the credit is being set will now be used as the end date. These rules of common set-off only apply within the same UTR.

However, where the set-off / reallocation is to be made to another UTR or charge under another head of duty via OAS, the end date will be the actual date the set-off or reallocation is made

Where you identify that the taxpayer has been disadvantaged, or receive an objection because of the interaction of RPS and interest, you should correct the SA record. The correction is to be made regardless of whether the RPS / interest calculation was caused by HMRC error or by the input of data notified by the taxpayer.

Notes: 

1. RPS will only be given if the EDP of the payment / credit is earlier than the relevant due date (RDD) of the charge.
   
2. The amount on which RPS has been calculated can be identified using function VIEW STATEMENT.
3. Where an interest charge is reduced and results in an overpayment this will not attract repayment supplement (RPS) as interest charges do not qualify for RPS.

Further information about dealing with objections and corrections to RPS / interest is provided in the Debt Management & Banking Manual (DMBM).