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HMRC internal manual

Compliance Handbook

Litigation and settlement strategy: resolving a dispute: no package details

You must not agree any sort of ‘package deal’ under which HMRC might be asked to concede one issue in return for the person conceding another.

Similarly you must not reach an agreement where a range of issues is settled for a single payment that is not subdivided amongst individual disputes.

Each separate dispute must be dealt with on its own merits, but this should include any genuine interaction between one issue and another.

See CH40850 for ‘all or nothing’ disputes and the example at CH40860.


If there is an agreed penalty position as part of the resolution of a case, this again should be clearly recorded and understood between HMRC and the person who is liable to the penalty.

You cannot forgo a penalty or allow it to lose its identity as part of the resolution of a dispute. Where the amount of the tax and the associated penalty have been separately established, you can only accept an offer as part of a contract settlement if that offer reflects those agreed figures. You cannot accept an offer that refers to any different arrangement of the tax, interest and penalty parts unless the revised amounts are justified, agreed, revised in writing and approved. For example, you cannot accept an offer where a higher amount of tax is offered as part of a contract settlement in order to avoid including a penalty. To do so would not be consistent with the law.