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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: settlement: tax relief for amount included in a Class 6 settlement

In a settlement letter you should

  • tell the employer that the

    • share of duties and NIC that they pay in the settlement will normally be allowable as a deduction
    • whether a deduction is allowable and its allocation to a particular period of accounts is a matter for the IT/CT caseworker to decide (BIM47090).

Where penalties or interest are included in the settlement

  • make it clear that these are not allowable as a deduction.