EM3980 - Concluding the Enquiry: Voluntary Restitution
Source: gov.uk (2025-10-27)


You will in most circumstances be able to recover any tax or national insurance contributions lost which are unpaid as a result of the customer failing to meet their obligations. This will not always be the case however, there will be occasions where arrears are identified as part of a compliance check which are not legally enforceable. For example
- duties have become time barred
- the taxpayer had a reasonable excuse for his failure EM5151 (https://www.gov.uk/hmrc-internal-manuals/enquiry-manual/em5151) or he pleads successfully either that his incorrect returns (or accounts) were submitted innocently EM5180 (https://www.gov.uk/hmrc-internal-manuals/enquiry-manual/em5180) (no neglect) for periods where the filing date for the return is on or before 31 March 2009
- for periods beginning on or after 1 April 2008 where the filing date for the return is on or after 1 April 2009, that the inaccuracy in the returns arose despite the taxpayer taking reasonable care, see CH81120 (https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch81120)
- the taxpayer has died and our right to assess is limited by TMA70/S40 (2)
- the taxpayer submitted a return (or accounts) at the proper time but we failed to open an enquiry in time.
In such circumstances the expected offer cannot include these duties, or related interest and penalties.

Nevertheless, it is considered that HMRC is justified in inviting voluntary restitution on equitable grounds.

You would then seek from the taxpayer or personal representative
- the amount of the expected offer, and
- the irrecoverable tax and NIC with simple interest but without any penalty.
Where the suggestion of voluntary restitution is not accepted, it should not be pressed, any subsequent negotiations being conducted without reference to the irrecoverable sums. It will be appreciated that any offer in excess of the expected offer will be acceptable.

In the case of a deceased partner, it will not normally be necessary to consider a request for voluntary restitution in relation to pre-SA partnership liabilities EM7300 (https://www.gov.uk/hmrc-internal-manuals/enquiry-manual/em7300)+. Similarly, the death of a director of a company under investigation will not normally affect HMRC rights of recovery of company liabilities, EM8740 (https://www.gov.uk/hmrc-internal-manuals/enquiry-manual/em8740).

If you need a voluntary restitution letter, and the case is straightforward, please use the letter templates provided: Individual and Company.

When preparing the voluntary restitution letter, you should:
- Use the appropriate letter template (Individual or Company), adapting it as necessary to suit the specifics of the case.
- Ensure the correct figures are included only in the Statement of Duties section.
- Leave the voluntary sum amount and the time for payment fields blank.
It’s important to ensure that all ‘Delete as appropriate’ sections are fully removed to maintain the validity of the Voluntary Restitution.

If you are unsure how to proceed or require assistance contact the Specialist Technical Team for advice, see Contact Link (https://www.gov.uk/hmrc-internal-manuals/enquiry-manual/em21000).