SAM112032 - Repayments: recover over-repayment: over-repayments: recovery by the SA system: interest bearing over-repayment charges (Action Guide)

Where the due date, tax year or amount of the over-repayment charge are incorrect, or the charge requires cancellation, follow steps 1 - 8 below. The guide is presented as follows

Creation of an interest bearing over-repayment charge - Steps 1 - 2
Increase / decrease the amount of an interest bearing over-repayment charge - Steps 3 - 4
Cancel an interest bearing over-repayment charge - Steps 5 - 8

Creation of an interest bearing over-repayment charge

1. Only those over-repayments on the W044 ‘Over-repayments’ work list should normally be considered for replacement by an interest bearing over-repayment charge. See W044 over-repayment work list (Action Guide) at SAM113031

Where you consider that an over-repayment is replaced by an interest bearing over-repayment charge, take the following action

  • In function VIEW STATEMENT select the line of the original repayment
  • Select the [Create over-repayment charge] button

2. The CREATE OVER-REPAYMENT CHARGE displays the details of the original repayment and over-repaid amount

  • The field Is all or part of the over-repayment to be replaced with a new charge ‘Y’ or ‘N’? is set to ‘Y’ - this is the default setting and does not require change
  • Complete the following three fields on the screen with
  • Tax year ending
  • Charge due date (this is the later of 31 January following the end of the tax year to which the over-repaid amount relates and the date the original repayment was issued)
  • Amount of the new interest bearing over-repayment charge (this cannot exceed the over-repaid amount)
  • Select the [OK] button

These actions will automatically replace all or part of the over-repaid amount with a new over-repayment charge on the SA record

Note: If more than one over-repayment charge is to be created for an over-repaid amount, say for two different tax years, the function CREATE OVER-REPAYMENT CHARGE must be accessed separately for each charge created

Increase / decrease the amount of an interest bearing over-repayment charge

3. Where an interest bearing over-repayment charge requires an increase or a decrease to the amount

  • On the SA statement, select the line for the over-repayment charge you want to increase or decrease
  • Select function MAINTAIN SUNDRY CHARGE

4. On the MAINTAIN SUNDRY CHARGE screen

  • Enter the revised amount of the charge (the over-repayment charge can only be increased up to the value of the original over-repaid amount)
  • Select the [OK] button

The customer’s SA statement will immediately reflect the increase or decrease of the over-repayment charge and the corresponding decrease or increase in the over-repaid amount

Cancel an interest bearing over-repayment charge

An interest bearing over-repayment charge may require cancellation because

  • The due date or tax year previously entered for the charge are incorrect
  • The charge amount requires reducing to zero
  • The over-repayment charge has been created in error

5. Where you intend to replace a cancelled over-repayment charge with another interest bearing over-repayment charge that relates to the same over-repaid amount, but the charge you want to cancel has already been paid in part or in full

  • Before you cancel the charge you must first transfer all payments / credits allocated against the charge and those allocated against any associated late payment interest charge, to OAS to avoid them being automatically reallocated by the SA system to the original over-repaid amount when the charge is cancelled. (The SA system will not allow payments / credits once allocated against an over-repaid amount to be reallocated to another charge)

To transfer any relevant payments / credits to OAS

  • Select the line of the payment or credit you want to transfer and select the function TRANSFER FROM TAXPAYER CREDITS - you must repeat this process for each payment or credit that you want to transfer to OAS, then
  • Make an appropriate SA note to explain why the payments / credits have been transferred to OAS

6. Once you have transferred any payments / credits to OAS, where appropriate, you are ready to cancel the over-repayment charge

  • Select the line on the statement of the over-repayment charge you want to cancel
  • Select function MAINTAIN SUNDRY CHARGE

7. On the MAINTAIN SUNDRY CHARGE screen

  • Enter zero in the amount field
  • Select the [OK] button

Although this action will not remove the charge from the customer’s SA statement, it will reduce the amount of the over-repayment charge immediately to zero and increase the original over-repaid amount accordingly

This will then allow you to create a replacement charge, if appropriate, using the function CREATE OVER-REPAYMENT CHARGE

8. Once you have created a new over-repayment charge, you need to arrange for the transfer back to the SA record of any payments / credits previously transferred out to OAS. To do this

  • Complete an SA331 OAS Allocation Form with the relevant reallocation details and send as an attachment to an e-form to ‘AO Cumbernauld WAM’ using the title ‘Sch D(SA) Work area’ in the Destination Office Details