Settlements with HMRC
At the end of any tax investigation where additional amounts of income and tax have been identified, it will be necessary to conclude matters in writing. These are known as Settlements.
A Settlement is one of the terms regularly used to indicate an agreed basis of closure between the taxpayer and HMRC. Other terms regularly used are “Letters of Offer”, “Contract settlement”, “Deed of Settlement” which all bring about closure.
In order to formally conclude any investigation or enquiry into a taxpayer’s
financial affairs, a Settlement will need to be reached. A Settlement can be a single side of A4 paper and consists of a statement of each the additional tax(es) due for each tax year, the interest being charged for late payment of that tax and the penalty.
Settlements are legally binding documents between the parties concerned when signed. Each taxpayer will have a separate Settlement, for example for each individual and each company.
The Settlement Agreement also states what amounts have already been paid on account and the balance due. A timetable will be included as to when and how the balance is to be paid to HMRC on what date(s).
HMRC. It will be based on what had previously agreed in writing by HMRC and the taxpayer.
If you would like to discuss this matter further, please contact me at firstname.lastname@example.org or on 07979 313 010.