Contract settlements: acceptance: SAFE - general
The guidance about contract settlements at EM6000+ only relates to direct tax. You must never include VAT or VAT penalties in a contract settlement.
The Strategic Accounting Framework Environment (SAFE) provides IT support for the collection and accounting of miscellaneous charges including Class1/1A settlement charges. Each Business Stream has a range of SAFE roles and these are allocated to ‘SAFE nominees’ and the Centralised SAFE Team in Local Compliance.
Once acceptance of an offer has been authorised by the appropriate authorising officer or manager, you must ask the SAFE nominee or, if you work in what was formerly Local Compliance, the Centralised SAFE Team, to create a charge on SAFE to account for the ‘net offer payable’ under the contract settlement. You must do this by completing the appropriate SAFE contract stencil. These are available in SEES.
The net offer, shown on the compliance settlement form (CSF) or form 94, is the gross offer less any payments made against assessments and CTA10/S458 relief already due or deferred. All payments on account should now be held on SAFE and locked. They will be automatically deducted from the net offer to arrive at the ’amount to be demanded’ on the notice to pay. The net offer shown on the CSF is not the same as the ‘net offer payable’ on the settlement statement. The net offer on the CSF, less any suspended penalty, is the ‘amount to be demanded’ figure on the CSF. This is the ‘net offer payable’ figure on the contract settlement stencil.
The appropriate SAFE contract stencil must be fully completed in all cases to enable the SAFE nominee or, if you work in what was formerly Local Compliance, the Centralised SAFE Team, to create the charge. In particular you must
- provide a breakdown of the settlement into the SAFE duty types for accounting purposes
- include your Compliance Identifier in the caseworker’s details section of the stencil, which is explained below
- list the payments on account and any repayments available for set off against the net offer
- provide a breakdown of the amount and due date for all instalments payments
- confirm the due date for payment.
Any payments on account will already have been locked, see EM6407. When you send the appropriate SAFE contract stencil to the SAFE nominee or the Centralised SAFE Team, you must tell them to contact the Miscellaneous Charges Unit to unlock the payments on account. The correct way to contact them depends on whether the SAFE charge is raised before or after 2pm.
If payments on account are held for a lump sum offer where the due date for payment is more than 30 days after the charge is raised, please refer to EM6405.
Additionally, if a company settlement has directors who are jointly and severally liable for payment of the contract settlement charge you should include the following code immediately after the Unique Case Identifier on the stencil - ‘CS Joint&Sev’.
It is suggested that you anticipate the due date for payment at the time the SAFE contract stencil is completed as 3 days plus the number of days specified in the offer. For example, 3 plus 30. This will allow sufficient time for the SAFE contract stencil to be processed and the letter of acceptance to be prepared in accordance with EM6410.
Before issuing the SAFE contract stencil you must
- informally discharge any unpaid duties on assessments or estimated assessments related to amounts included in the offer. Include amounts that have been stood over because they are under appeal. For ITSA cases, this will clear worklist WO15 but create a WO36 worklist entry, which should be cleared by your manager
- prepare and issue form SA331 or CT251 in respect of any overpayments on SA or COTAX which are to be set off against the settlement (if the overpayment is not on SA or COTAX you should use the R90A procedure),
- prepare and issue the appropriate transfer of payment stencil if any payments are to be transferred to other Head of Duty systems or are to be transferred to or from other SAFE references, and
- allow sufficient time for all payments on account and set offs to reach SAFE to ensure the notice to pay (issued centrally by SAFE) is for the correct amount.
When the SAFE nominee or the Centralised SAFE Team has confirmed that the charge has been raised you must
- immediately issue the letter of acceptance, which must include the SAFE charge reference, and
- retain the SAFE contract stencil electronically in Caseflow/CRMM, see ‘How to capture a document’, or as a paper version in the enquiry papers.
If the stencil details (taxpayer address/payments on account/amounts to be set off) do not match the information held on SAFE it will be returned to you within 3 days by the SAFE nominee or Centralised SAFE Team. They will explain why it has not been actioned.
You should follow the guidance for your own business area on how to contact the Centralised SAFE Team.
Points for the SAFE Nominee or Centralised SAFE Team to Note
- Organisation Unit Identifier (OUID)
SAFE uses the Organisation Unit Identifier (OUID) of the SAFE Nominee or Centralised SAFE Team to determine the name, address and telephone number to include on SAFE Outputs.
Where the enquiry officer and the SAFE Nominee or Centralised SAFE Team do not work in the same OUID the SAFE Nominee or Centralised SAFE Team must select the OUID for the Enquiry Officer from the ‘Alt Office’ menu.
- Unique Case Identifier
To enable Debt Management Unit (DMB) to identify the compliance unit and enquiry officer, the SAFE nominee or Centralised SAFE Team must enter the enquiry Unique Case Identifier, in the ‘Local ref’ field on SAFE. Where this is not known they should enter the enquiry officer’s name.
- Identifying Joint and Several Settlements
If the SAFE Stencil includes the reference ‘CS Joint&Sev’ immediately after the Unique Case Identifier, this must also be included in the ‘local ref’ field to enable the SAFE team to identify these cases.
- Payments on account
Any payments on account (POAs) should have been locked. Where there are payments on account, you should
* check the SAFE contract stencil against the SAFE record to ensure the POA held agrees with the details on the stencil * raise the charge in SAFE using the agreed Case Identifier immediately contacting the Miscellaneous Charges Unit to unlock the payments on account. The correct way to contact them depends on whether the SAFE charge is raised before or after 2pm. * it is essential that the payments are unlocked on the same day the charge is raised * return the stencil to the caseworker, clearly noting the SAFE Charge reference.