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HMRC internal manual

Enquiry Manual

Contract settlements: acceptance - letter of acceptance

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

You can prepare a letter of acceptance for an offer when

  • the offer is satisfactory in every respect, see EM6401, and
  • the offer has been authorised by the appropriate Authorising Officer on a Contract Settlement form (CFS) or form 94, see EM6402, and
  • the SAFE charge has been raised and payments on account or set-offs have been correctly accounted for, see EM6410.

You should prepare the acceptance letter as soon as possible after acceptance of the offer has been authorised and the SAFE charge raised. The letter does not have to be issued or signed by the Authorising Officer who formally accepted the offer by signing the CSF or form 94, see EM6402.

There are two versions of the letter of acceptance, which are available in SEES Forms and Letters.

The correct letter to use will depend on the basis for payment set out in the offer.

You should use LoA 1, if you are accepting a single payment offer or LoA 2, if you are accepting an instalment offer.

Do not amend or add anything to the text of these standard letters. If you need contact the taxpayer about any other matter, use a separate letter.

When completing the SEES letters, follow the instructions on the input screen.