Supporting Guidance: employer compliance: guidance by subject: settlement: contract settlements - SAFE: reopening a contract settlement
It could be argued that where an employer has entered into a legally binding contract, any adjustment to the underlying figures should be precluded. This would place a cooperative employer at a disadvantage compared with an uncooperative employer against whom formal steps had to be taken at every stage who still has open to him all of the relieving provisions of the Taxes Acts.
HMRC will be prepared to reopen a settlement to the extent necessary to allow an employer the benefit of any adjustment which could have been claimed if the liability had been dealt with by assessment/determination.
The circumstances in which HMRC will consider reopening a settlement are explained at (EM6413).
If it is considered appropriate to reopen a settlement you should discuss the case with the manager. If the manager agrees to reopen the settlement you should
- recalculate the expected offer
- obtain written agreement to the amount of the reduction from the employer
- obtain signed confirmation of the amounts paid against the settlement, including interest.
If the reduction in the settlement results in a repayment becoming due you should
- follow the guidance at EM6417
- arrange for the issue of a note to the Centralised SAFE Team to reduce or cancel the charge (COG915140 - SAFE - Class 6 Amendment, COG915145 - SAFE - Amending a Charge).
If a balance is still due and payable following the reduction in settlement you should
- arrange for the balance to be paid by the employer.
If there is still a balance which is not immediately due and payable (for example on an instalment offer) you should