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HMRC internal manual

Enquiry Manual

HM Revenue & Customs
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Contract settlements: acceptance: authorisation levels

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

When an offer has been received from the taxpayer authorisation to accept the offer must be sought at the appropriate level from the appropriate Authorising Officer.

For authorisation levels for

  • WMCB/ISBC Teams (which were formerly Local Compliance), see EM6402a
  • National Teams (which were formerly High Net Worth), see EM6402b.

In all cases, acceptance of an offer must be authorised by an officer of at least Band O grade.

Where the offer is less than the expected offer your recommendation for acceptance or rejection to the Authorising Officer must be clearly set out and the reasons why.

If the offer has to be submitted to an Authorising Officer who was formerly a Local Compliance Authorising Officer (LCAO), or Lead CRM, for acceptance, you will need to complete an AO Report Form, which is available in SEES, unless you have been advised to the contrary. You should also make sure that the relevant case papers are made available to the Authorising Officer for them to check.

If payment is due on a specific date or the first instalment is due shortly your report must highlight this.

If the offer is acceptable this will be recorded on the contract settlement form (CSF) or form 94 by either the

  • appropriate manager
  • Authorising Officer (who was formerly a LCAO), or
  • lead CRM.

CH411130+ explains how the CSF can be used and saved electronically.

If the offer has been accepted by an Authorising Officer (who was formerly a LCAO), or Lead CRM, they will confirm this in a covering memo and provide any advice necessary to bring the case to a conclusion, for example advice regarding any amounts to be set against the settlement.

If the offer is accepted you should

  1. follow the accounting procedures for SAFE, see EM6403.
  2. prepare a letter of acceptance in accordance with EM6409.

The acceptance does not need to be signed by the person who formally authorised it, and can be signed by any HMRC Officer.

If you are signing the letter it is important to remember that the letter of acceptance is issued on behalf of The Commissioners for Her Majesty’s Revenue and Customs, this creates the binding contract. The standard letters of acceptance, see EM6409, should not, other than in the payment information section, be varied without agreement from contact link.