COM80050 - Interest: how interest is calculated: negative credit interest
Where credit interest originally calculated and posted requires amendment downwards, negative credit interest is posted on to the record. This can happen in the following situations.
- Credit interest has been repaid for a CTSA AP and that AP is then superseded. The payments on which the credit interest was calculated on the superseded AP are reallocated to the new AP. Credit interest is therefore no longer due and is cancelled.
- The 鈥榪uarterly instalment payment鈥� (QIP) signal is changed from 鈥楴鈥� to 鈥楲鈥� or 鈥榁L鈥櫬爋n the AP. Credit interest was originally calculated as though the AP was a non-QP case and all the tax was due by the normal . When the 鈥楺IP鈥� signal is amended to 鈥榊鈥�, credit and debit interest is calculated from the quarterly instalment due dates.
- Payments on which credit interest was calculated are subsequently reallocated and credit interest is no longer payable on these payments.
- The AP is adjusted and the tax charge is increased.
Negative credit interest is shown as a 鈥榤inus鈥� credit interest posting in function VPPD (View Payment and Posting details). Where the original credit interest was either reallocated or repaid then the creation of negative credit interest may leave the AP with a collectible balance in the amount that was reallocated or repaid. This amount does not attract late payment interest.
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