Contract Settlements: Letters of Offer: Detail - Consideration
The guidance about contract settlements at EM6000+ only relates to direct tax. You must never include VAT or VAT penalties in a contract settlement.
In English law a contract normally requires consideration to make it binding - the taxpayer’s offer to pay is matched by HMRC’s agreement not to take any further proceedings.
Scottish contract law does not have this requirement but it is still desirable to set out the consideration in a Scottish offer.