Contract Settlements: Letters of Offer: Checklist
The guidance about contract settlements at EM6000+ only relates to direct tax. You must never include VAT or VAT penalties in a contract settlement.
- pay particular attention to the points below when checking the draft of the letter of offer, and
- refer to EM6252 where instalments are necessary.
- Does the letter make sense?
- Does it set out in clear and unambiguous words the terms which have been agreed, or which you expect to be agreed at the settlement interview?
- Does it set out the consideration for the payment to be made by the taxpayer?
- Does it set out all the duties (and any NIC) taken into account in framing the offer?
- Does it contain a reference to the taxpayer’s failure or default?
- Does it mention interest and/or penalties and/or surcharge?
- Does it set out the gross amount of the offer before any deductions?
- Does it show separately, and in precise terms, any deduction?
- Does it show any balance still to be paid?
- Does it say precisely when payment is to be made?
- Does it specifically exclude any duties or NIC which will not be included in the settlement?
- Is it suitably worded for signature by the person(s) intended to sign it?
- Does it include the standard interest clause?