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HMRC internal manual

Enquiry Manual

Contract Settlements: Letters of Offer: Taxpayer's Own Draft

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 the taxpayer or agent does not use your suggested version and sends their own letter of offer, you should consider its terms carefully by reference to the same criteria EM6310+.

Where there are omissions or unsatisfactory features

  • ask the taxpayer or their agent to make the necessary additions or corrections, or
  • prepare a fresh draft incorporating as much of the taxpayer’s version as is acceptable.

If the original letter is amended all the alterations should be initialled by the signatory.

Occasionally a taxpayer who has paid all the duties makes an offer which includes only the interest and penalties. There is no objection to this but you should

  • seek advice from contact link about the precise wording of the offer.