COM128030 | Repayments/reallocations: repayment interest: automatic calculation of RPI - reallocations

From HM Revenue & Customs · COTAX Manual

When an overpayment arises and is to be reallocated and all the following apply:

certain conditions (see COM120003) exist on the overpaid Accounting Period (AP)
there is an outstanding liability on one of more other APs
no conditions exist on the COTAX record to prevent an automatic reallocation being made. For more information on this subject see section ‘Inhibit Automatic Process’ COM120030

COTAX will

calculate any repayment interest (RPI) due to the date of the reallocation
make the reallocation automatically

COTAX will automatically calculate if any RPI is due and determine the EDP (see Glossary) to apply to the reallocation on the receiving AP by

comparing the normal due date (see Glossary)of the overpaid AP with the normal due date of the receiving AP
then use the common period rules ( see Glossary for more information)

The following table provides some examples

Situation	Result
When the normal due date of the receiving AP is the same or earlier than the normal due date of the overpaid AP	COTAX will not add any RPI. The EDP of the reallocation posting on the receiving AP will be the same as the EDP of the original posting on the overpaid AP
When the normal due date of the receiving AP is later than that of the overpaid AP, but earlier than the date of reallocation	For a payment with an EDP earlier than the normal due date of the receiving AP. RPI will be calculated up to the normal due date of the receiving AP. The EDP of the reallocation posting on the receiving AP will be the normal due date of the receiving AP
For a payment made on or after the normal due date of the receiving AP	No RPI will be added The EDP of the reallocation posting on the receiving AP will be the same as the EDP of the original posting on the overpaid AP
When the normal due date of the receiving AP is later than that of the overpaid AP, and later than the date of reallocation	RPI will be added to the date of the reallocation The EDP of the reallocation on the receiving AP will be the date of the reallocation

Please note that:

1. When repayment interest is reallocated the EDP of the posting on the receiving AP will always be the date of the reallocation.

(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)

For legislation applying to this subject, see COM128013