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HMRC internal manual

Enquiry Manual

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.

You should

  • pay particular attention to the points below when checking the draft of the letter of offer, and
  • refer to EM6252 where instalments are necessary.
Point   See
a 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? EM6335    
  b Does it set out the consideration for the payment to be made by the taxpayer? EM6336
  c Does it set out all the duties (and any NIC) taken into account in framing the offer? EM6337
  d Does it contain a reference to the taxpayer’s failure or default? EM6338
  e Does it mention interest and/or penalties and/or surcharge? EM6339
  f 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? EM6340    
  g Does it say precisely when payment is to be made? EM6341
  h Does it specifically exclude any duties or NIC which will not be included in the settlement? EM6342+
  i Is it suitably worded for signature by the person(s) intended to sign it? EM6350
  j Does it include the standard interest clause? EM6351