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HMRC internal manual

Enquiry Manual

From
HM Revenue & Customs
Updated
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Contract settlements: overcoming delay

The guidance about contract settlements at EM6000+ only relates to direct tax. You must never include VAT or VAT penalties in a contract settlement.

We only accept acceptable offers but you should not spend too much time trying to obtain one. If an acceptable offer is not forthcoming after a reasonably short interval you should

  • set off down the formal route of closure/amendment/assessment
  • seek authorisation for penalty determinations/assessments, without delay (EM1360)
  • keep the taxpayer and agent fully informed of what you are doing and why while making it clear you are still open to further discussion.

Remember you can switch back to a contract settlement at any stage up to, and only excluding, formal penalty determinations/assessments becoming final and conclusive.