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HMRC internal manual

Enquiry Manual

Contract settlements: letters of offer: detail - signature

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

A letter of offer should normally be signed by the person who is intended to make the payment.

Deceased Taxpayer

If the taxpayer has died the offer should be signed by his personal representatives. EM6338.

Other Persons Joined in the Offer

There will be occasions when other persons will be a party to a joint and several offer (see company specimen letters in EMapp1). In such cases it must be clear from the wording and layout of the offer that their signatures are required. Often, they will have to sign twice, once as directors on behalf of the company and once in their own right. You should make this clear in the draft.


An offer from a company should normally be signed on its behalf by

  • a director and the secretary, or
  • two directors.

However, changes made by the Companies Act 2006 mean that private limited companies

  • may, from 1 October 2007, only have one director, and
  • are not required, from 6 April 2008, to have a company secretary.

You can accept a letter of offer signed on behalf of a company by only one director, provided there is no reason to doubt that the director is authorised to bind the company into a legal contract. For example, you may have doubts about their authority where a sole director is not also the majority shareholder in the company.

With larger companies, where there are separate finance and accountancy teams who have the authority to sign cheques or enter business contracts on behalf of the company, you can accept offers that are signed by officers or employees who have this authority.

If you have any doubts as to whether they have the authority to bind the company into a contract, you should insist that the offer is signed by two directors, or a director and secretary.

EMapp1 contains specimen letters.

Signature by a Reputable Agent

It is always preferable for the taxpayer, rather than their agent, to sign the letter of offer because we can then be certain that the taxpayer fully understands what is included in the offer and it is made with their full authority.

There will however, be circumstances where this is not possible because, for example they are out of the country or in hospital.

Where the taxpayer is not able to sign, you can accept a letter of offer signed by a reputable agent provided

  • it satisfies all the required conditions and
  • there is no reason to doubt that the taxpayer authorised his agent to make it.

If an agent is making the offer on behalf of their client, the wording of the standard letters in EMapp1 should be amended in the following way:

‘The tax (and the Class 4 National Insurance Contributions)* on the statement below/attached/overleaf* is/are unpaid, wholly or in part, because of the failure of A.B. to meet all his/her* obligations under the Taxes Acts. On the basis that no proceedings are taken against my/our* client for (that tax/Class 4 NIC*) (those liabilities)*, or for the penalties, surcharge and interest on them.

I/we* ….. offer …..

If the offer is to be signed by the agent and culpability is disputed EM6338 appropriate wording would be as above substituting ‘the alleged failure of AB’.

Exceptional Cases

You should

  • seek advice from contact link if, exceptionally, it is suggested that an offer could or should be signed by someone other than the taxpayer, either in addition or in place of him (for example, their spouse or partner if they are ill).