COM71120 - Enquiries: CTSA enquiries: closing an enquiry: closing an enquiry: contract settlements

In a contract settlement case, you should follow the general procedures in the Enquiry Manual (at EM3831 and EM6000 onwards) and the SAFE accounting procedures at EM6043 - EM6408, subject to the following modifications for any CTSA AP.

In particular, it is essential that you amend the COTAX record to reflect the accounting arrangements made during the settlement.

The Enquiry Manual, at EM6000 - EM6001, tells you to be particularly careful not to issue anything which could be construed as a Closure Notice (Word 28KB) when you intend to conclude an enquiry by contract settlement. With that in mind

• You should not use Function RAMA, ‘Prepare a Closure Notice with Rev Amdt’ option, to issue a Closure Notice

It is essential to look at and understand the COTAX charge and payment record for all relevant APs in Function VPPD (View Payment and Posting Details) before agreeing the terms of the settlement. The general principles are then as follows

• Leave undisturbed any assessments (including self assessments) and late filing penalty determinations already made. Do not make any new ones
• Leave in place any payments recorded on the COTAX record against assessments, interest charged, and penalty determinations
• Informally discharge any unpaid liabilities using Function RINF (Record Informal Discharge)
• Reallocate any overpayment from COTAX to the settlement charge using Function REOD (Direct Reallocation Out of COTAX)

• Reallocate the necessary amount using Function REOD (Direct Reallocation Out Of COTAX)
• Use Function REWD (Direct Reallocation Within COTAX) to reallocate the balance against other liabilities
• If there are no such liabilities, repay the balance to the company using Function DIRR (Direct Repayment)

After you have made those changes, you will need to tell COTAX that the enquiry has been concluded

• Use Function MAPS (Maintain AP Signals) to

• • Enter the enquiry Ended date equal to the date that the settlement offer is accepted

• • Doing that will automatically set the enquiry In Progress signal to ‘N’
    

• • You can view the changes to those two signals in Function DAPD (Display AP Details)
    

See the ‘Closing An Enquiry: Contract Settlements’ (COM71120) Action Guide for the detailed procedures to follow for any CTSA AP. See the Enquiry Manual at EM6043 - EM6408 for the procedures to follow for a CT Pay and File AP.

For a list of forms relevant to this subject, see COM71021.

For a list of functions to use in particular situations, see COM71011.

For legislation applying to this subject, see COM71012.