Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Enquiry Manual

Contract settlements: expected offer: instalments - example 3

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

An offer for £10,000 where quarterly instalments are requested, could be expressed as follows

£2,000 Already paid on account.
£8,000 To be paid by 16 quarterly instalments of £500 each, on or before the last day of each third succeeding calendar month, the first such instalment to be paid on or before the last day of the third calendar month next following that in which falls the date of the letter notifying acceptance of this offer by you.


until the whole of the £10,000 has been paid.’

This formula, suitably adapted, can also be used for monthly instalment cases where all the instalments are the same, and there is no initial “odd” instalment as in EM6253.