SolvedCOM23090 | Assessing: CTSA assessments: make or amend tax or penalty charges on same day
From HM Revenue & Customs · COTAX Manual
Whenever you make or amend an assessment using function RAMA (Record/Amend Assessment) and your actions affect the penalty position for the specified period into which the Accounting Period (AP) falls, you see a choice of actions at the end of the function, depending upon the penalty position.
The options you see are:
allowing the automatic issue of penalties
proceeding to function PPEN (Prepare Penalty Determination) to issue or revise the penalty determination
setting the ‘no penalty required’ indicator
you should normally select proceeding to function PPEN to issue or revise the penalty determination
It is important to note that if you make an assessment first and then select the automatic issue of penalties option, or use function PPEN to issue a penalty determination, any overpayment on the assessment will be repaid automatically and not allocated against any unpaid liability on the penalty determination.
This happens even when the penalty determination is made on the same day as the assessment and the company will receive a repayment and an application for payment within a day or two of each other.
You must stop this happening by using function MRSC (Maintain Repay/Realloc Signals (Company)) to inhibit automatic reallocations and repayments at company level.
This makes sure that COTAX:
reallocates the tax overpayment against the penalty charge
issues a payment application for the net penalty due or repays any remaining overpaid balance
You must remember to unset the signal after COTAX has dealt with the reallocation so that automatic reallocations and repayments can continue.
If you find that you have issued an assessment that has caused an overpayment, selected automatic issue of a penalty or used function PPEN to issue a penalty, but forgotten to inhibit repayments and reallocations, you can use function SREP (Stop Repayments) to stop the repayment, but only on the same day.
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