COM122014 - Repayments/reallocations: non automatic reallocations: functions: reallocation into COTAX, responsible CT office (Action Guide)
Source: gov.uk (2025-12-02)


To set off an overpayment from outside COTAX against an Accounting Period (AP) on the company’s COTAX record, consider steps 1 - 18 below. The guide is presented as follows.

Set off an interest-bearing amount

1. Use function VPPD (View Payment and Posting Details) to check the payment and postings record for the Accounting Period (AP) against which you intend to make the set off. If a colleague has already made the set off there will be a payment posting ‘PYT’ shown in function VPPD with ‘DSO’ in the Notes column.

2. If the set off will make the receiving AP overpaid, use function MAPS (Maintain AP Signals) and select ‘Reallocations & Repayments’ from the drop-down menu for the Manual Inhibitions field. You cannot make a superseded AP overpaid.

3. Use function DSET (District Set Off) to set off the overpayment. Make sure that you:
- enter the correct Effective Date of Payment (EDP). See COM122010 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com122010) for details
- select the duty type being set off from the drop-down menu for the Type of Set-Off field. Do not enter the duty type against which you are making the set off in this field
- enter how you want the set off to be allocated. This is either specific amounts against tax, interest, penalties or automatically allocated according to the normal rules. See COM120020 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com120020) for more information and COM122010 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com122010)for guidance on DSET codes
If you allocate the set off to tax, COTAX calculates any repayment interest that is due for duty types Income Tax (IT) deducted at source or Construction Industry Scheme (CIS25/SC60) to 5 April 2002.

COTAX calculates any repayment interest that is due for the following duty types provided the EDP has been reached:
- Research & Development Tax Credit
- Film Tax Relief
- Land Remediation Tax Credit
- tax credits
4. Use function VPPD to check the results by looking for a ‘PYT’ posting endorsed ‘DSO’ in the Notes column.

5. If you used function MAPS and selected ‘Reallocations & Repayments’ from the drop-down menu for the Manual Inhibitions field at step 2 and you have repaid or reallocated any resulting overpayment, use function MRSC to select None from the drop down menu for the Manual Inhibitions field.

Set off interest

6. Use function VPPD (View Payment and Posting Details) to check the payment and postings record for the Accounting Period (AP) against which you intend to make the set off. If a colleague has already made the set off, there will be a payment posting 'PYT' shown in function VPPD with 'DSO' in the Notes column.

7. If the set off will make the receiving AP overpaid, use function MAPS (Maintain AP Signals) and select ‘Reallocations & Repayments’ from the drop down menu for the Manual Inhibitions field. You cannot make a superseded AP overpaid.

8. Use function DSET (District Set Off) to set off the interest. Make sure that you:
- enter the EDP (Effective Date of Payment) as today’s date
- select ‘Repayment Interest’ or ‘Repayment Supplement’ as appropriate, as the duty type being set off from the drop down menu for the Type of Set-Off field
9. Use function VPPD to check the results by looking for a ‘PYT’ posting endorsed ‘DSO’ in the Notes column.

Set off Research & Development and Creative Industries Tax Credit and Expenditure Credit

These set offs are normally carried out in Specialist Units.

11. Use function VPPD (View Payment and Posting Details) to check the payment and postings record for the Accounting Period (AP) against which you intend to make the set off. If a colleague has already made the set off there will be a payment posting ‘PYT’ shown in function VPPD with ‘DSO’ in the Notes column.

10. If you used function MAPS and selected ‘Reallocations & Repayments’ from the drop down menu for the Manual Inhibitions field at step 7 and you have repaid or reallocated any resulting overpayment, use function MAPS to select ‘None’ from the drop-down menu for the Manual Inhibitions field.

12. If the set off will make the receiving AP overpaid, use function MRSC (Maintain Repayment/Reallocation Signals) and select ‘Reallocations & Repayments’ from the drop down menu for the Manual Inhibitions field. You cannot make a superseded AP overpaid.

13. Use function DSET (District Set Off) to set off the tax credit. Refer to COM122010 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com122010) and enter the Effective Date of Payment (EDP) shown.

For the Type of Set-Off field, select from the drop-down menu as the duty type being set off as follows:
- for R&D Tax Credit and RDEC select Research and Development Tax Credit
- for Creative Industries Tax Credit and AVEC/VGEC select Film Tax Relief
14. Use function VPPD to check the results by looking for a ‘PYT’ posting endorsed ‘DSO’ in the Notes column.

15. If you used function MRSC and selected ‘Reallocations & Repayments’ from the drop down menu for the Manual Inhibitions field at step 12 and if you have repaid or reallocated any resulting overpayment, use function MAPS to select ‘None’ from the drop down menu for the Manual Inhibitions field.

Set off where the Accounting Period (AP) is part of a Group Payment Arrangement (GPA)

16. Use function DAPD (Display Accounting Periods) to check the status of the GPA for the company:
- if the GPA is open, ask the Group Payment Team in Government Banking and Payments (GBP) to temporarily unlock the record so that you can post the DSET (District Set Off) and carry out the necessary actions. Inform them when the action is completed so they can add the company back into the GPA. Contact the Group Payment Team on xx-xxxx-xxxx (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- if the GPA is closed, we are awaiting either the completed CT630 (Notice of Closure) or CT631 (Apportionment Notice) response from the company. The Group Payment Team will not be able to unlock the record and you cannot add the DSET until this is received. You should BF the case and make a COTAX note
- if the GPA is cleared, you will be able to post the DSET and carry out the necessary actions immediately. You do not need to contact the Group Payment Team
Set off a SAFE repayment against COTAX

17. Complete a SAFE Repayments stencil (SAFE 1) and pass it to your SAFE user who will set the No Repayment signal on SAFE if necessary, and send the form to the Miscellaneous Charges Unit. You can find the SAFE 1 stencil on SEES > Forms and Letters > category ‘SAFE’.

18. Complete the stencil in full and provide the following specific information:
- enter ‘Repayment Set off’ in the space given to provide the reason for your repayment
- give full details of the reason for the overpayment and if appropriate, details of any repayment supplement or interest that is due including the ‘from’ and ‘to’ dates for all non Section 455 (S455) Corporation Tax Act (CTA) 2010 (formerly S419 Income and Corporation Taxes Act (ICTA) 1988), charges in this space
- where repayment interest is due for S455, use the specific box to provide the dates from which it should be calculated ‘from’ and ‘to’ so the Miscellaneous Charges Unit can correctly calculate the interest due on the set off
- enter the UTR, Accounting Period (AP) number and duty type of where the overpayment is to be allocated and the Effective Date of Payment (EDP) to be given to the set off to in the ‘Repayment Nominee’ box
See COM122010 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com122010) for a table of Effective Dates of Payment.

19. The Miscellaneous Charges Unit will arrange to reallocate the set off to the COTAX charge using OAS. You must not use function DSET (District Set Off) to set off a repayment arising on a SAFE record, including CT61 charges, against COTAX. All overpayments arising in SAFE are dealt with by the Miscellaneous Charges Unit.