EM6403 - Contract Settlements: Acceptance: SAFE - General
The guidance about contract settlements at EM6000+ only relates to direct tax. You must never include VAT or VAT penalties in a contract settlement.
The Strategic Accounting Framework Environment (SAFE) provides IT support for the collection and accounting of miscellaneous charges including Class1/1A settlement charges. Each Business Stream has a range of SAFE roles and these are allocated to “SAFE nominees” as appropriate.
Once an offer has been accepted by the appropriate authorising officer or manager you must ask the SAFE nominee, using the SAFE stencil (available in SEES), to create a charge on SAFE to account for the Net Offer payable under the contract settlement.
The net offer, shown on form 94 Part 3 or compliance settlement form, is the Gross Offer less any payments made against assessments and CTA10/S458 relief already due or deferred. All payments on account are now held on SAFE which will automatically deduct them from the net offer to arrive at the “Amount to be demanded” on the Notice to pay.
A SAFE stencil must be fully completed in all cases to enable the SAFE nominee to create the charge. In particular you must
- provide a breakdown of the settlement into the SAFE duty types for accounting purposes
- include your Compliance Identifier in the caseworker’s details section of the stencil, which is explained below
- list the payments on account and any repayments available for set off
- provide a breakdown of the amount and due date for all instalments payments
- confirm the due date for payment.
Any payments on account will have been locked, see EM6407. When you send the stencil to the SAFE nominee you should remind them to phone the SAFE team (This text has been withheld because of exemptions in the Freedom of Information Act 2000) to unlock the payments before 2pm on the day that the charge is raised.
If payments on account are held for a lump sum offer where the due date for payment is more than 30 days, please refer to EM6405.
Additionally, if a company settlement has directors who are jointly and severally liable for payment of the contract settlement charge you should include the following code immediately after your PID on the stencil - "Local Ref 9999999 CS Joint & Sev".
It is suggested that you anticipate the due date for payment at the time the stencil is completed as 3 days + the number of days specified in the offer. For example, 3 + 30. This will allow sufficient time for the stencil to be processed and the letter of acceptance to be prepared in accordance with EM6410.
Before issuing the stencil you must
- informally discharge any unpaid duties on assessments included in the offer,
- prepare and issue form SA331 or CT251 in respect of any overpayments available for set off against the settlement (if the overpayment is not on SA or COTAX you should use the R90A procedure), and
- allow sufficient time for all payments on account and set offs to reach SAFE to ensure the notice to pay (issued centrally by SAFE ) is in the correct amount.
When the SAFE nominee has confirmed that the charge has been raised you must
- issue the letter of acceptance in accordance with the due date for payment entered on SAFE
- retain the stencil in the enquiry papers with the letter of offer and form 94 or CSF.
If the stencil details (taxpayer address/ payments on account/amounts to be set off) do not match the information held on SAFE it will be returned to you within 3 days by the SAFE nominee. They will explain why it has not been actioned.
Points for the SAFE Nominee to Note
- Organisation Unit Identifier (OUID)
SAFE uses the Organisation Unit Identifier (OUID) of the SAFE Nominee to determine the name, address and telephone number to include on SAFE Outputs.
Where the enquiry officer and the SAFE Nominee do not work in the same OUID the SAFE Nominee must select the OUID for the Enquiry Officer from the “Alt Office” menu.
- Compliance Identifier
To enable Debt Management Unit (DMB) and the SAFE team to identify the compliance unit and enquiry officer, the SAFE nominee must enter the enquiry Compliance Identifier, see EM6407, in the “Local ref” field on SAFE. Where this is not known they should enter the enquiry officer’s PID.
- Identifying Joint and Several Settlements
If the SAFE Stencil includes the reference "9999999 CS Joint & Sev" immediately after the PID, this must also be included after the PID in the "Local ref" field to enable the SAFE team to identify these cases.
- Payments on account
Any payments on account should have been locked. Where there are payments on account, you should
-
- check the stencil against the SAFE record to ensure the POA held agrees with the details on the stencil
- raise the charge in SAFE using the agreed Compliance Identifier
- immediately telephone the DMB SAFE Unit to arrange for the POAs to be unlocked (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
- it is essential that the payment is unlocked on the same day the charge is raised
- return the stencil to the caseworker, noting the SAFE Charge reference.
