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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: settlement: no agreement

Where the employer refuses to agree a settlement there may be no alternative but to proceed formally (see COG915150 for Regulation 80, COG915155 for NIC Decisions and COG914175 - Formal Action Penalties).

Where the employer refuses to agree because of the inclusion of interest in the settlement explain why the interest has arisen

  • that it is statutory and mandatory
  • it is not a fine

    • it is commercial restitution (compensation for the loss of use of money over time, like any other interest charge)
    • it is a means of maintaining equity between those who pay by the required date and those who do not
  • that it will continue to accrue if any part of the interest-bearing duty remains unpaid.


There is no specific power to mitigate interest see EM4040.

In a contract settlement interest can be reduced if there has been unreasonable HMRC delay COG903620 - Complaints and putting things right.

If an employer/contractor pursues a complaint stating that excessive delay has caused or contributed to the interest charge you must refer the situation to

  • TALA Liverpool for advice.

Where you receive an objection to an interest charge it should be referred to the

  • DMB Interest Review Unit.

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Time to Pay

Where it becomes clear that the employer is asking for time to pay follow COG914550 - Time to pay.

Where the employer needs additional time to consider the settlement

  • calculate interest to an anticipated date of payment
  • tell the employer that

    • providing an acceptable letter of offer is received promptly the interest sought will remain as calculated
    • if an acceptable letter of offer is not received promptly the interest may be increased.