EM6415 - Contract Settlement: Post Settlement Issues - Reopening a Settlement: Method of Giving Relief
The guidance about contract settlements at EM6000+ only relates to direct tax. You must never include VAT or VAT penalties in a contract settlement.
Once we have a valid claim to re-open a settlement, see EM6412 to EM6414, you must
- recalculate the ‘expected offer’, see EM6416
- agree the amount of the reduction with the taxpayer or their agent
- check what has been paid.
To check what has been paid against a contract settlement charge, e-mail the SAFE Charge Reference to
- either the SAFE nominee, or
- the Centralised SAFE Team if you work in Local Compliance
and ask them to confirm the amounts that have been paid, and when.
Where some of the liabilities arising from your enquiry were assessed formally, you can check the amounts paid, including any interest against any assessments on the SA Statement.
You should save a copy of the e-mail or the statement in Case Document Store or with the case papers if the case is not in Caseflow.
If the taxpayer has paid the whole of the amount due under the settlement, you should make a repayment, see EM6417.
If they have not paid the full amount, but have paid sufficient for a repayment to be due
If there is still a balance that is due and payable by reference to the reduced settlement figure
- arrange for the balance to be paid by the taxpayer
- tell the SAFE nominee, or the Centralised SAFE Team if you work in Local Compliance, what is happening and ask them to notify you when payment has been received
- on receipt of the SAFE nominee’s or Centralised SAFE Team’s report of payment, cancel the unpaid balance.
If there is still a balance which is not immediately due and payable for example, on an instalment offer, do not make any repayment but simply arrange for the necessary cancellation to be made by following the guidance in the previous paragraphs.
