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HMRC internal manual

Enquiry Manual

HM Revenue & Customs
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Contract Settlements: Interest: Certificates of Tax Deposit - Action

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

If a CTD is to be used in payment, or part payment, in an enquiry settlement, you should

  • obtain details of the Certificate (amount, number and date)
  • ascertain the taxpayer’s intentions for the treatment of the Deposit EM6020, and any balance unused
  • agree a settlement date, and
  • email the CTD Team Mailbox, see EM1020 to check what interest is to be credited, giving the expected date on which a payment under the contract offer will be due.

You will then be able to draft the letter of offer EM6025, which should refer to the surrender of the Certificate and be accompanied by it. This reference to surrender is to avoid any possibility of the taxpayer changing his mind about the use of the Deposit after a binding contract, including interest based on the Deposit, has been concluded.

When you forward the form (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

you should attach the CTD and a typed memo showing how, in accordance with the taxpayer’s request, the Deposit is to be utilised.

You should submit an enquiry case, see contact link, if

  • without prior arrangement, a Certificate of Tax Deposit is tendered in settlement or part settlement of an enquiry settlement, and
  • the taxpayer claims that the settlement should be re-opened because the interest included therein is now excessive.