HMRC internal manual

Enquiry Manual

EM6360 - Contract Settlements: Letters of Offer: Detail - Married Women up To 5 April 1990

You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.

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

For years of assessment up to and including 1989-90, offers in settlement will normally be sought from the husband including tax, interest and penalties arising on his wife’s income.

When omissions of wife’s income which are assessable both before and after April 1990 are discovered you will have to

  • obtain separate offers from the wife for 1990-91 onwards and the husband for earlier years, and
  • point out that it was the husband’s responsibility to ensure that all his wife’s income and gains were returned for periods before Independent Taxation.

Where the omissions have been calculated by scaling back the agreed figures for the latest year, and years prior to 1990-91 are involved you should

  • point out to the wife that the liability will be her husband’s, and
  • ask her if she is prepared for him to attend the settlement interview.

If this is not possible you should reveal only the minimum details necessary to convince the husband to sign the offer.

It will obviously be quicker and easier for all concerned if a joint interview can be arranged.

If one of the spouses wishes to make an offer in settlement covering the whole period of investigation seek advice on the wording of the offer - see contact link.