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HMRC internal manual

Enquiry Manual

Contract settlements: expected offer: general

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

Once you have agreed the duties, NIC and interest, and calculated the amount of the penalty, you must arrive at the expected offer by adding these figures together and rounding the total of all these down to the nearest whole pound.

You must no longer invite offers that are rounded to the nearest £50. If you receive an uninvited offer that has been rounded down in this way, it should be treated as a substandard offer, see EM6210.