SVM116080 - Case Selection, Handling and Settlement: Key Principles – Acceptable Settlement Terms

• HMRC strategy is that each tax dispute should be dealt with on its own merits. We should not enter into “package deals”, in which a range of issues are settled for a single payment of tax that is not subdivided amongst individual disputes.
• Some disputes have an all-or-nothing character, involving a single point of law that would be decided one way or the other by the courts, with no middle ground. Such disputes should be settled on all-or-nothing terms: we should not split the difference or offer any discount for an agreement not to litigate.
• Where there is a dispute over facts or valuation – and this involves most cases handled by SAV - there will often be a range of plausible figures for tax due. Your best estimate must not be materially less than you would reasonably expect to obtain from litigation, though it may be at the cautious end of that range.
• This guidance assumes that ability to pay will not be an issue in determining settlement terms.