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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
, see all updates

Charging penalties: contract settlement: cases that can be settled by contract

VAT must not be included in a contract settlement.

Other tax cases should be settled by contract when

  • it is not practicable to assess tax, see CH411100 (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)

Otherwise, cases should be settled by Revenue amendment and/or assessment plus penalty assessment or determination.

(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)

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A standard contract settlement offer can only be accepted if the tax and penalties can be legally charged by amendment of the return or formal assessment/determination which could be defended at tribunal. Exceptionally we can accept a voluntary restitution contract offer for out of date years, see EM3980 and COG915015.

In a standard contract you must seek the full amounts of tax and penalties that are payable by law. If a person is not able to pay the full amount of tax, follow the guidance at

  • EM6237 in IT cases or
  • COG915030, COG915075 and COG914550 in EC/CIS cases.

If a person is not able to pay a penalty, follow the guidance at EM5213.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Do not invite an offer before

  • tax and penalty amounts have been explained, see CH279000
  • any issues or disputes have been resolved, see CH280000 and
  • you have agreed the timescale for when the letter of offer will be received.