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.
When you reopen a contract settlement a varied letter of offer will need to be issued to the customer. Please contact TALA through the contact link for suitable wording and enclose the original letter of offer and letter of acceptance in your submission.
To check what has been paid against a contract settlement charge, email the SAFE Charge Reference and the Head of Duty Reference, for example the UTR or BROCS Reference, to either
- the SAFE nominee, or
- the Centralised SAFE Team if you work in ISBC, and then
- ask them to confirm the amounts that have been paid, and when.
If you are sending the email to the Centralised SAFE Team, you must include 'Miscellaneous' in the subject line of the email.
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 customer 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 customer
- email the SAFE nominee, or the Centralised SAFE Team if you work in ISBC to tell them what is happening and ask them to notify you when payment has been received.
If you are sending the email to the Centralised SAFE Team you must include the SAFE Charge Reference and the Head of Duty Reference, for example the UTR or BROCS Reference, in the email. You must also include 'Miscellaneous' in the subject line of the email.
On receipt of the SAFE nominee’s or Centralised SAFE Team’s report of payment, cancel the unpaid balance. In a Class 1A case, cancel the outstanding balance, see EM6408.
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.