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HMRC internal manual

Enquiry Manual

Contract Settlements: Letters of Offer: Delay in Acceptance

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

Once made, an offer which is neither withdrawn nor rejected remains open for acceptance for a reasonable time. We consider six months is a reasonable time.

Where an offer is not accepted within six months of the date of the letter of offer through

  • delay or
  • the need for clarification

you should

  • ask the taxpayer to confirm in writing that they wish the offer, un-amended in any respect (except as specified), to go forward for consideration.

Where the offer cannot be accepted locally EM6402a and EM6402b you should

  • ensure that it is submitted in good time for the acceptance letter to be issued within the 6 month period.

If the submission is made within a month of the crucial day you should

  • mark the case prominently for urgent attention or give advance warning.

An offer can only be formally rejected by the Board. So an attempt

  • to negotiate further, or
  • to re-open negotiations (whether on Head Office instructions or otherwise)

could in law amount to the rejection of the offer.

If you are unable to secure a better offer and propose to accept (or recommend acceptance of) the original offer you should

  • request a letter on the lines suggested in the first bullet point above, unless advised to the contrary by ‘contact link’.