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HMRC internal manual

Technical Teams Operational Guidance

Civil Investigation of Fraud (Code 9): historical record: penalties and settlement of cases: settlement

Where agreement is reached without formal proceedings, direct tax cases are normally settled through a voluntary contract settlement, whereas indirect tax cases are finalised by raising formal assessments of tax - different procedures are then enacted to pursue and collect the debts.

In ‘contested’ cases, there are also great differences in approach in terms of assessment time limits, appeals and debt recovery procedures. Some of these differences are being resolved by the Powers Review, but others remain.

These differences do not make HMRC’s actions improper or unlawful. Therefore, existing settlement procedures should be used as appropriate for direct taxes and indirect taxes.