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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: letter of offer: acceptance

Once the expected offer has been:

you must invite the employer or contractor to make an offer for consideration by HMRC, see COG914505 onwards.

Once received, the letter of offer must be accepted by HMRC in order to form a legally binding contract.

A correctly worded letter of acceptance is equally as important as a correctly worded letter of offer, see EM6301.

On receipt of a letter of offer:

In cases of doubt or difficulty, contact TALA for advice (see COG904770).

If the letter of offer is satisfactory, submit the case to the appropriate  authorising officer who will consider whether or not we can accept the offer.

Under no circumstances is self authorisation allowed.


Note: The Authorising Officer (AO) may differ between business areas and teams, and sometimes between different cases within a team. In normal circumstance this will be one level above the caseworker and could also be

  • a line manager or manager with the appropriate skills
  • another manager or tax specialist within a team
  • a tax specialist from another team, or
  • a Customer Compliance Manager (CCM). The CCM may be the same grade or a lower grade than the tax specialist or caseworker.

Previously, some offers had to be authorised by a Local Compliance Authorising Officer (LCAO). Although the LCAO role no longer exists, a similar level of higher authorisation is still required for some offers.

The precise arrangements for authorisation will depend on your business team, if you are uncertain of the details you should check with your manager.

Any references to the LCAO in this guidance should now be read as referring to whoever is now responsible for these higher authorisations in your business team.

Note: Different criteria for higher authorisation referrals apply in different business teams.

For specific guidance relating to employer duties higher authorisation in Mid-sized Business, see COG914571.

For specific guidance relating to employer duties authorisation of settlements over £100,000 in ISBC, see COG914572.

In all cases when the settlement has been authorised, you should:

  • complete the Class 6 Contract Settlement Stencil
  • follow the SAFE accounting procedures, see COG915105
  • obtain the SAFE charge reference for inclusion in the letter of acceptance
  • arrange for the issue of the acceptance letter. The letters of acceptance are available on SEES with the following product codes -
    • LOA1 Letter of Acceptance - single payment
    • LOA2 Letter of Acceptance - instalment

Note: The acceptance does not need to be signed by the person who formally authorised it, see EM6402.

The acceptance must be unequivocal. The terms of the offer must not be modified in the letter of acceptance and any attempt to do so could make the acceptance ineffective. If there is any more to be said a separate letter should be sent.