CCM8490 - Closing the Examination: Inviting the Offer - Wording of the Offer

Templates for your draft letter of offer are provided at CCM8740 to CCM8810 (Appendix 1 - 8). You will need to use the template relevant to your case and then choose the appropriate options. These templates have been written in plain English and you should follow the wording precisely. When you are in a position to invite the offer you should prepare a draft offer on plain paper. Stationery bearing any official heading (e.g. office headed note-paper) must not be used, and it must not include any HMRC footnotes or logos.

If you are recovering overpaid credits your offer must include a statement of the tax credits overpaid. You need to show the WTC and CTC overpayments separately in the statement. Before handing over the draft check that the wording is correct in every way. You should allow a minimum of 30 days for payment but the claimant is free to settle sooner. You might need to allow longer if it will take the claimant a little time to gather together the funds, but this needs to be realistic.

Example - Robbie has agreed a settlement of £3,300 and has savings in a 60-day building society account. You might need to allow 60 days in your letter of offer so that he can access his savings. In such circumstances it would be unreasonable to insist that he settles in 30 days time. However there is no need to allow anything more than 60 days, he is expected to give immediate notice to his building society.

If you are allowing a period longer than 30 days for repayment you will need to consider any interest implications - see CCM Chapter 10 - Penalties and Interest. If you need to invite an instalment offer – see CCM8510.

With letters of offer the normal practice is to leave the amount blank so that it is the claimant’s offer. There may be occasions when you do not know how the offer will be met until you hold a settlement meeting, but you want to draft the offer in advance. Unless you know otherwise you should calculate the offer to reflect a payment in one lump sum. If an instalment arrangement is agreed at a meeting you will need to calculate the forward interest before inviting the offer.

You will need to explain to the claimant either at a settlement meeting or in a letter how you have arrived at the amount of the expected offer. You will need to tell them the amount of any overpaid credits, the amount of any interest and the amount of penalty you are proposing. It is also worth pointing out the maximum amount of penalties, which are permitted under the Tax Credits Act 2002. In all cases you must warn the claimant that any future incorrect application or failure to notify a change of circumstances is likely to result in a much higher penalty.

Whether you invite the letter of offer at a meeting or by correspondence will depend on the circumstances of the case – see CCM8295.

• Where you are inviting the letter by correspondence see CCM8550.
• Where you have suggested a settlement meeting and the claimant refuses or does not reply or does not attend the suggested meeting, you should issue the letter at CCM8550.
• Where you are inviting the letter of offer at a meeting you should ensure that you cover the points shown at CCM8550. If the claimant signs the letter of offer – see CCM8560. If they ask for time to consider the offer and then do not come back to you – see CCM8540.