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HMRC internal manual

Enquiry Manual

From
HM Revenue & Customs
Updated
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Contract Settlement: Post Settlement Issues - Reopening a Settlement: Introduction

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

Both you and the taxpayer (or his agent) will have considered carefully

  • the liabilities which made up the settlement, and
  • the ability of the taxpayer to meet the obligations arising from it.

Any subsequent problems should therefore relate to recovery with which you should not normally be concerned.

Debt Management have limited discretion to deal with temporary problems, such as a taxpayer who needs to defer a couple of instalments of an instalment settlement but will be able to catch up and revert to the terms of the agreement.

You may become involved if

  • an adjustment becomes necessary to the figures included in the settlement, see EM6413 
  • the taxpayer now wishes to clear all or part of the outstanding liability of an instalment arrangement, see EM6414 
  • the taxpayer is unable to meet his commitments and it seems appropriate to re-negotiate the settlement, see EM6418.