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HMRC internal manual

Technical Teams Operational Guidance

Settlement by agreement: general: freedom from duress

An enforceable contract can only be negotiated with both parties acting voluntarily and free from duress. This does not mean that it is improper to point out to a taxpayer the seriousness of the offences giving rise to the negotiations and our ability and willingness to initiate formal civil proceedings if negotiations are fruitless. What must never be done however is to imply, even remotely, that a criminal investigation might be the consequence of a failure to make a satisfactory agreement to conclude the case.

In Code 8 cases it should never be suggested that a failure to satisfactorily negotiate might lead to the case being re-designated as Code 9. If Code 9 was thought appropriate then negotiations should not be in progress to settle under Code 8.

If the other side raise the matter of a criminal investigation in the settlement negotiations they should be informed that this is a civil enquiry being conducted with a view to a civil settlement.