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HMRC internal manual

Inheritance Tax Manual

Settling the penalty: correcting errors in the offer

If the amount of the offer is acceptable but the letter is not, you should try to rectify the error in the simplest way possible. This might involve obtaining a fresh offer or returning the original for amendment and/or initialling. You should not use correcting fluid, especially for any really material parts of the offer.

If the error or omission is a minor one, the taxpayer can be told that the offer is acceptable in principle, but for the defect, and that a formal letter of acceptance (IHTM36267) will be issued when the balance due is paid. If the offer is accompanied by payment of the penalty in full, no collection problems can arise and the letter of acceptance can be issued.

If the defect cannot be remedied in the way suggested above, and the taxpayer is not readily accessible, an amending letter from the agent referring to the defect in the original letter should be requested followed by a paragraph on the following lines

‘We are authorised by our above-named client to refer to his letter of offer dated ……….. and to confirm that payment of the net sum of £……. due under the offer will be paid within 30 days of the date of the letter notifying your acceptance of the offer.’

If this is done, the letter of acceptance should be amended to read

‘With reference to your client’s letter of ……… (and your letter of ……..) in which ……’.

If a letter of offer that has to be considered by Tax Administration, Litigation and Advice (TALA) (IHTM36361) for other reasons contains errors, you should consider whether to submit the case so that it can be considered in principle. This will allow you to deal with any other flaws at the same time. In such a case, you should only accept payment of the balance due if the taxpayer or his agent confirms in writing that the payment is tendered as payment on account and that it is understood that its acceptance does not commit the Board in any way.