CCM11380 - End of Year Issues: Adjustment needed and penalties appropriate - making a S18 decision

The way in which you close an examination including a penalty is very different to the position where there is no penalty. HMRC’s preferred method of settling a case involving a penalty is with a contract letter of offer.

For these cases you should follow the guidance at CCM8230 but remember your decision will be under S18 and not S14/15/16. When you are informing the claimant of the outcome of your examination you will also need to tell them of your S14 decision for the following year. This could be that they have no entitlement for that year or that you have made a provisional decision but you might be seeking further information regarding this claim at a later stage.

Although it will now be after 5 April you will still restrict the inclusion of overpaid credits in a contract letter of offer to the cases where you have established no entitlement - see CCM8125.