EM6321 | Contract Settlements: Letters of Offer: ‘Without Prejudice’

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

A customer who marks an offer ‘without prejudice’ does so to prevent the offer from being used subsequently.

If you do not accept the offer you cannot use it as evidence that, for example, certain figures have been agreed. You should attach to the offer a note referring to this guidance to ensure that it is not inadvertently used improperly.

If the offer, is acceptable, the 'without prejudice' marking will not present any difficulty to the offer being accepted.