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HMRC internal manual

Specialist Investigations Operational Guidance

Settlement by agreement: means to fund the offer: forward interest

Forward interest is an addition to the penalty in an offer where payment is to be deferred or paid by instalments, not only to recognise the deferment, but also the additional risks and costs of collection. In accordance with EM6250 interest should be sought to the date of payment; otherwise the offer must be regarded as sub-standard (see SIOG9430).

Where an amount in settlement is to be paid without instalments within 30 days or so of the letter of acceptance the calculations of interest on unpaid tax is taken up to a date adjacent to the date of the offer.