To be effective an enquiry settlement must result in a legally
binding and enforceable contract between the purchaser and the
Board.
A new liability under the law of contract replaces the
previously existing and separate liabilities to assessment of tax,
interest and penalties imposed by Finance Act 2003.
The contract comes into existence when a letter of offer
signed by or on behalf of the purchaser is accepted by or on behalf
of the Board.
CIR v Nutall (63TC148) gave judicial approval to our
long-standing practice of reaching and enforcing contract
settlements with purchasers in respect of tax, interest and
penalties.
The wording of the letters of offer and acceptance must allow
for legal action if payment is not made.
