HMRC internal manual

Enquiry Manual

EM6355 - Contract Settlements: Letters of Offer: Detail - Partnerships

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

Pre-SA Years

For partnerships, each partner is liable to pay all the duties, NIC and interest, and each will have incurred penalties. Each partner will be expected to sign the offer. Where this is not possible, any number of partners, or even a single partner, can make a valid offer which will however be enforceable only against the signatories. Such an offer (subject to means, EM6214), should normally be for the full amount of the expected partnership offer.

You should

  • seek advice from contact link where a partner (or group of partners) is prepared to make an offer but objects that the penalties included exceed his personal liability to penalties
  • include in the partnership offer only partnership duties and obtain separate offers in respect of the individual partners’ liabilities.

Transitional Years 1994/95 to 1996/97

For a continuing ‘old’ partnership, that is one in existence before 06/04/94, joint and several offers from the partnership are required.

For a ‘new’ partnership, that is one which came into existence on or after 06/04/94, offers should be sought from the individual partners.

SA Years

For self assessment years for 1997/98 onwards there are no partnership duties as such. Offers must be sought from individual partners.


For all years joint and several liability applies to partnerships in their capacity as employers. The Compliance Operational Guidance (COG) contains guidance on employer investigation including specimen letters of offer.

Married Women

For years up to 1989/90 (pre-Independent Taxation) the income and gains of a married woman were aggregated with those of her husband and assessed on him EM6360.

However for these years, a married woman who is a member of a trading partnership is a partner in her own right. Whether or not her husband is also a partner, she should sign the partnership offer.