Contract Settlement: Post Settlement Issues - Reopening a Settlement: Procedures When Repayment Due
The guidance about contract settlements at EM6000+ only relates to direct tax. You must never include VAT or VAT penalties in a contract settlement.
If you receive a claim for repayment where the taxpayer is challenging the amount of the settlement on the basis that we have included duties that we were legally not entitled to include, you must approach Contact Link for advice before proceeding further.
Otherwise you should
- check Case Document Store or the enquiry papers to find out whether any repayments have previously been made
- make sure that the repayment being claimed is correct in all respects because we will have to legal basis to recover any over payments at a later date
- agree the amount of the repayment with the taxpayer
- make it clear that the proposed repayment is ex gratia
- complete the SAFE Repayment Stencil (SAFE 1 new) which is in SEES Forms and Letters
- submit the case to your line manager to authorise the repayment.
Where a repayment is £250,000 or more, you will also need to have the repayment authorised at Grade 6 level before you will be able to complete the SAFE Repayment Stencil.
When the repayment has been authorised ask the SAFE nominee or the Centralised SAFE Team if you work in Local Compliance to
- reduce the SAFE charge by the amount of the repayment, see EM6408, and
- issue the repayment stencil to the Miscellaneous Charges Unit in DMB.
If the SAFE nominee or Centralised SAFE Team cannot amend the charge or it is a non-SAFE charge you should issue the SAFE Charge Amendment Stencil (SAFE 2 new) with the repayment stencil to the Miscellaneous Charges Unit. A signed duplicate of this stencil should also be retained in Case Document Store or with the enquiry papers if the case is not in Caseflow.
You should follow the operational guidance for you business area on how to contact the Centralised SAFE Team and the Miscellaneous Charges Unit in DMB.
In all cases you must record details of the revised amount of the settlement and the date the repayment was authorised. This should be recorded in Caseflow or in red ink on the front of the enquiry folder.