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HMRC internal manual

Compliance Operational Guidance

Alternative rights of recovery (PAYE directions): contract settlements: instalment offers and forward interest

Where payment is to be made by instalments the draft letter of offer at COG932360 must precisely state the amount of each instalment and its dates for payments in accordance with EM6252.

The amount to be offered, as calculated on a cash basis, must be increased to compensate for the time allowed for payment and the extra risk and cost.

This ‘forward interest’ is not statutory interest under Section 86 TMA. It is payable under the terms of the contract and HMRC’s consideration for it is the time allowed for payment.  See EM6250 for further guidance.