EM6412 - Contract Settlement: Post Settlement Issues - Reopening a Settlement: Introduction

The guidance about contract settlements at EM6000+ only relates to direct tax. You must never include VAT or VAT penalties in a contract settlement.

Both you and the taxpayer (or his agent) will have considered carefully

• the liabilities which made up the settlement, and
• the ability of the taxpayer to meet the obligations arising from it.

Once a contract settlement is formed, any subsequent problems should relate to recovery and you should not usually be involved.

Debt Management have limited discretion to deal with temporary problems, such as a customer who needs to defer a couple of instalments of an instalment settlement but will eventually revert fully to the terms of the agreement.

You may become involved if

• an adjustment becomes necessary to the figures included in the settlement, see EM6413 
• the customer wishes to clear all or part of the outstanding liability of an instalment arrangement, see EM6414 
• the customer is unable to meet their commitments and it is appropriate to re-negotiate the settlement, see EM6418.