CH411050 - 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.

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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 Exceptionally we can accept a voluntary restitution contract offer for out of date years, see EM3980.

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.

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

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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.