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
- TAA Liverpool for advice.
Where you receive an objection to an interest charge it should be referred to the
- DMB Interest Review Unit.
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.