ECH22035 - Settlement: No Agreement
Where the employer refuses to agree a negotiated settlement there may be no alternative but to proceed formally. However EC staff should
- try to reach agreement by pointing out it is reasonable because
- if HM Revenue & Customs has to proceed formally it does so in figures which are to the best of our judgement. These may be less favourable than some put forward for settlement by negotiation
- the underpayment (excluding any penalty or interest) will normally be allowable as a deduction in computing profits although this is a matter for the Business Accounts Inspector to decide.
Where the employer refuses to negotiate because of the inclusion of interest in the settlement
- explain why the interest has arisen and that it
- is statutory and mandatory
- cannot be mitigated except in very narrow circumstances, (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
- is not a fine. It is commercial restitution (compensation for the loss of use of money over time, like any other interest charge)
- It is a means of maintaining equity between those who pay by the required date and those who do not
- continues to accrue if any part of the interest-bearing duty remains unpaid.
Where it becomes clear the employer is asking for time to pay
see
ECH21535.
Where the employer needs additional time to consider
settlement
- calculate interest to an anticipated date of payment.
- tell the employer that
- providing an acceptable letter of offer is received promptly then the interest sought will remain as calculated but
- if an acceptable letter of offer is not received promptly the interest may be increased.
