EM6051 | Contract Settlements: Penalties: Calculation Outline

The guidance about contract settlements at EM6000+ only relates to direct tax. You must never include VAT or VAT penalties in a contract settlement.

You should work out the maximum statutory penalties incurred (and still in date for formal proceedings) by reference to the offences committed EM4500+.

At this stage you should decide, on the evidence so far shown, the abated penalties EM6052.

If the penalty is in respect of an error (inaccuracy) in a return or other document that

• relates to a tax period beginning on or after 1 April 2008, and

• has a filing date on or after 1 April 2009

you must not use the following guidance to work out the penalty. You should instead refer to the Compliance Handbook at CH82000+.