FCIM109040 - Where CDF offer is made up to 29 June 2014: penalties and settlement of cases: settlement
Where agreement is reached and it is administratively more convenient for both the taxpayer and HMRC, direct taxes are normally settled through contract settlement. Where agreement can not be reached, or you consider that this would be less resource intensive, you should proceed formally and make any assessments and/or determinations.
Indirect tax issues can not be settled through a contract settlement and should be finalised by raising formal assessments.