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HMRC internal manual

Enquiry Manual

HM Revenue & Customs
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Contract Settlements: Letters of Offer: Detail - 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.

The letter of offer is intended to form the basis for a legally binding contract with terms which cannot subsequently be disputed.

It should not contain any

  • unacceptable terms such as

    • ‘I reserve the right to re-open this offer if I can find evidence of my gambling wins’
  • uncertain terms such as

    • ‘I shall pay the sum of £x as soon as I can’
  • conditional terms such as

    • ‘if I can sell my house for £x’.