HMRC’s preferred method of settlement in a case involving
penalties is by way of a legally binding and enforceable contract
between the claimant and the Commissioners for HMRC. A contract
comes into existence when a letter of offer, signed by or on behalf
of the claimant, is accepted by or on behalf of the Commissioners
for HMRC.
In English law a contract normally requires consideration to
make it binding. In this case the consideration is the
claimant’s offer to pay which is matched by the
Revenue’s agreement not to take any further proceedings.
Scottish contract law does not have this requirement but it is
still considered desirable to set out the consideration in an offer
from someone living in Scotland.
The wording of the letter of offer and the letter of
acceptance must be such that they represent a legally binding
contract and provide a basis for legal action in the event of
default. It is therefore very important that both letters are
correct in every way.
CCM8490 tells you about the wording of
the offer.
