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HMRC internal manual

Enquiry Manual

Contract settlements: expected offer: approval

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

In all cases the expected offer must be approved by your line manager before settlement discussions begin.

You must use form 94 or a contract settlement form (CSF)

  • to show the components of the expected offer EM6201, and
  • for your line manager to record approval of the expected offer.

The CSF is available in the SEES Penalties Toolkit. For guidance on how the CSF can be used and saved electronically, see CH411130+.

Where the offer has to be submitted to a Local Compliance Authorising Officer (LCAO) for acceptance - EM6402 - you should at this stage start

  • preparing the schedule of tax and NIC lost, interest due, assessments made, open self assessments and so on together with an AO Report Form, which is also available in SEEs.

Preparation of the schedule at the time you prepare the computation of unpaid liability and interest will help ensure that nothing is overlooked and that no errors of principle are made in either

  • the duty computation, or
  • the calculation of interest or surcharge.