Contract settlements: expected offer: no co-operation
The guidance about contract settlements at EM6000+ only relates to direct tax. You must never include VAT or VAT penalties in a contract settlement.
Where there is a total lack of response from the taxpayer or his agent but there is reason to believe that the taxpayer has funds to meet a settlement you should
- write a personal letter to the taxpayer
- an agreed settlement is the preferred option, but
- without co-operation there is no alternative to the commencement of formal proceedings, and
- formal proceedings may be suspended if a satisfactory offer is made
- start formal steps to establish firm liabilities to tax, NIC, interest and penalties EM3950+ if no co-operation is forthcoming.
Where Enforcement and Insolvency Service (EIS) has become responsible for collectible arrears, you should
consult with that office before
- formal stand over of any of those arrears or
- inclusion of any of the tax, etc in a contract settlement.
EIS may already have begun formal recovery proceedings in such cases, and a unilateral suspension of collection by you could put those proceedings at risk.