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HMRC internal manual

Enquiry Manual

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 Certificate of Tax Deposit (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 Tax Deposit EM6020, and any balance unused
  • agree a settlement date, and
  • email the CTD Team Mailbox 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 enclosed Certificate. This reference to surrender is to avoid any possibility of the taxpayer changing their mind about the use of the CTD after a binding contract, including interest based on the Tax Deposit, has been made.

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 used.

You should seek advice from Tax Administration Litigation and Advice, see contact link, if

  • without prior arrangement, a CTD 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 in the settlement is now excessive.