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HMRC internal manual

Enquiry Manual

From
HM Revenue & Customs
Updated
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Contract Settlements: Letters of Offer: Detail - Date of Payment

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

Payment will normally be due ‘within 30 days of the date of the letter notifying acceptance of this offer by you’.

This should allow sufficient time for the funds to be made available. Any shorter period would be at the taxpayer’s suggestion and any longer period would be at the taxpayer’s request. EM6235.

Where, exceptionally, it is necessary to enter a specific date for payment (for example ‘on or before 1 January 2003) you should

  • ensure that date is far enough ahead for the offer to be made and accepted before payment is due.

You should

  • make sure the terms of payment are clear cut, for example ‘£ ….. to be paid within 30 days of the date of your letter accepting this offer’.
  • not refer to the date of receipt of the letter by the taxpayer as this cannot always be established.

You should ensure that the due date of each instalment in instalment offers is clear by

  • using specific dates or preferably
  • linking them with the date of the acceptance letter EM6252+
  • not tying instalments to the date of payment of earlier instalments as they may be paid late.

If the offer is one which cannot be accepted locally you should

  • allow extra time for the submission.

If payment is due within a month you should

  • clearly mark the deadline on your report and file, or
  • give advance notice.