EM6303 - Contract Settlements: Letters of 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.

It will be apparent from EM6301 that the terms of a letter of offer need to be chosen with great care.

Standard approach

You can find examples of standard letters of offer appropriate for individuals, partnerships and companies at EMapp1. These letters are drafted

  • to cover all the essentials as succinctly as the subject allows
  • for use in cases which present no abnormal features and
  • to avoid the need to distinguish culpable and non-culpable amounts included in the settlement.

You must make sure that the letter of offer is enforceable by providing the taxpayer or agent with a draft letter based on the appropriate example.

Examples

The examples at EMapp1 cannot cover every situation and you must adapt them where necessary to suit particular circumstances.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

In all cases

The letter of offer must be typed on plain paper. Do not use headed notepaper or stationery with official crests or logos.

Leave the amount of the offer and the time for payment blank. The taxpayer should complete them. This is to avoid accusations that the caseworker or manager has dictated terms or been unwilling to listen at the settlement meeting or discussion.

When you have completed your draft letter of offer you should

  • check that the wording is wholly satisfactory, and
  • pay particular attention to the points summarised at EM6252 and EM6310.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)