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HMRC internal manual

Compliance Operational Guidance

HM Revenue & Customs
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Alternative rights of recovery (PAYE directions): contract settlements: when should you make a contract settlement?

Appropriate circumstances

  • The taxpayer requests a settlement and offers to pay promptly, accepting that the settlement only relates to the tax/NIC liability on their employment income and that HMRC may wish to enquire into other aspects of their SA return.
  • The taxpayer volunteers to pay the full liability in the warning letter, but needs time to pay.

Inappropriate circumstances

  • The taxpayer refuses to withdraw the appeal against the direction notice.
  • There is an open Section 9A enquiry.
  • An unwarranted SA repayment has been made in one or more years for which a direction has been made or is intended.