CCM14382 - Closing the Enquiry: Full and Final Settlement

If the claimant amends the wording in a letter of offer to include ‘full and final settlement’ or includes these words in a covering letter you need to be particularly careful with the offer.

No ongoing award

Where there is no ongoing award you should normally include any s18 overpayment in your settlement in addition to the overpayment in respect of your enquiry – see CCM14268. In this situation the inclusion of the words “in full and final settlement” may be acceptable as long as it is clear it is in full and final settlement of all overpayments referred to in your letters and computations.

If a phrase like “in full and final settlement of all overpaid tax credits for the years …. to …..” is used you must only accept the offer if it is made clear in correspondence that it is in respect of the overpayments established up to that point. If you do not do this we might be unable to use s20 (discovery) at a later date if some new information comes to light.

Ongoing award

Where there is an ongoing award your letter of offer will be a penalty only offer. If the claimant makes it clear the offer is in full and final settlement of the penalty then the inclusion of the words is acceptable. If this is not made clear, you will need to explain to the claimant that the offer only includes the penalty before you accept the offer. If you do not do this we might be unable to recover the overpayment arising from your enquiry and it might also prevent us recovering any s18 overpayment.

Other HMRC duties

If the claimant’s wording makes any reference to other HMRC duties or suggestion that it covers other HMRC debts you must not accept the offer. You will need to make it clear to the claimant that your offer only refers to the tax credits settlement. If you do not do this we might be unable to recover other debts, for example underpayments of tax.

If you are unsure about the wording in an offer or the covering letter you must consult your manager. If necessary, advice can then be obtained from (This text has been withheld because of exemptions in the Freedom of Information Act 2000).