Admitting tax fraud: the Contractual Disclosure Facility (CDF)
The CDF is your opportunity to tell HM Revenue and Customs (HMRC) about any tax fraud you've been involved in.
If you want to report someone else for fraud you can tell HMRC - your information will be handled securely and safely - and you don’t have to give your name.
Owning up to fraud
This guide explains what happens and what to do if you get a letter and a Code of Practice 9 (COP9) from HMRC. It will explain that HMRC suspect you of committing tax fraud, and will offer you a contract though the CDF. It also explains what to do if you want to own up voluntarily to committing fraud.
CDF is only suitable for people who want to admit to tax fraud. It’s not for people who want to tell HMRC about errors, mistakes or avoidance schemes where there isn’t fraud.
What the CDF is
The CDF is the opportunity for you to tell HMRC about any tax fraud you’ve been involved in.
If HMRC write to you because they suspect you’ve committed a tax fraud, the letter will offer you a CDF contract and will include:
- an acceptance letter
- a rejection letter
- a disclosure form
- a copy of COP9
Under CDF, you have 2 options:
- own up to bringing about a loss of tax through your deliberate conduct - you do this by accepting the offer of CDF
- reject the offer of CDF
What happens if you own up to committing fraud
If your deliberate conduct has brought about a loss of tax, you must think about whether using CDF is right for you.
If you decide it’s right, sign up to the CDF contract with HMRC. This means that both you and HMRC agree to stick to the terms and conditions of the contract.
- agree not to criminally investigate with a view to prosecuting you for the deliberate conduct you tell them about in the CDF contract
- admit that your deliberate conduct has brought about a loss of tax
- tell HMRC about all the tax losses brought about by your deliberate conduct
- give as much detail as you can within 60 days of being offered the contract
- if asked, give additional details following the 60 day period - include a statement that you’ve given HMRC complete and accurate details of your deliberate conduct
Accepting HMRC’s offer of CDF is the only way to guarantee that HMRC won’t criminally investigate with a view to prosecuting you for the tax losses your deliberate conduct brought about.
If you meet your side of the contract, you’ll ensure that any penalties are closer to the lower penalty levels.
You’ve 60 days to decide whether you want to accept HMRC’s offer of CDF. The 60 day period will run for 60 calendar days after you get the CDF letter from HMRC.
During those 60 days, HMRC won’t contact you unless you’ve told them that you either do or don’t want to provide details of tax fraud.
HMRC can still:
- take action against goods you own or possess
- start or continue debt collection
- continue any other action that’s needed as part of HMRC’s legal obligations
What happens if you reject the offer of CDF
If you decide that you don’t want to accept the offer of CDF, sign and return the CDF rejection letter that HMRC sent you, within the 60 day time limit.
If you reject the offer of CDF, HMRC may begin a criminal investigation into your tax affairs at any time. The letter you’ve signed can be used in court as evidence to show that you intended to deliberately mislead HMRC. Following your rejection, someone in HMRC will contact you to explain what will happen next and what you need to do.
What happens if you don’t reply to HMRC’s letter
If HMRC don’t hear from you within the 60 days, either to accept or reject the offer of CDF, they’ll consider that you’ve chosen not to co-operate. HMRC will begin either a civil or a criminal investigation into the tax fraud they suspect you’ve committed.
Owning up to tax fraud voluntarily
If you’ve committed tax fraud and you want to own up to this, let HMRC know. By filling in the contractual disclosure form CDF 1 you can ask HMRC to consider you for a CDF contract, you don’t have to wait for HMRC to contact you.
HMRC don’t have to offer you a contract, and won’t be able to if you’re already involved in a criminal investigation by HMRC or another law enforcement agency (such as the police). If you’re already dealing with HMRC on other tax issues but want to be considered for CDF, discuss this with the HMRC officer dealing with your case.
Questions about how CDF works
If you’ve any questions during the 60 days about how CDF works, or you don’t understand the letter you’ve been sent, contact HMRC by using the CDF Helpline, or email address.
Telephone: 03000 579 336
HMRC strongly advise that you get independent advice before you complete any CDF letter or form, or ask if you can enter into a contract with them.
The advisers on the helpline will:
- answer technical questions about CDF
- explain what specific things mean, for example, if you don’t understand part of one of the letters HMRC has sent you
The advisers can’t:
- answer questions about your own case, or anyone else’s
- give advice about examples or pretend situations (hypothetical questions)
- give you their name
- answer questions about any other area of tax or benefit that is administered by HMRC
Calls to the helpline won’t be recorded, but HMRC will use the questions asked as feedback to help them identify areas where they can improve their letters, publications and how CDF works.
The CDF Helpline is open 10am to 3pm Monday to Friday. It’s closed weekends and bank holidays. If the line is closed or busy please leave your name, telephone number and a brief message and we’ll call you back. Telephone: 03000 579 336
Look for more detailed guidance in the Fraud civil investigation manual. It may provide the information you need, but if in doubt call the helpline.
Code of Practice 9 investigations where HMRC suspect tax fraud tells you in detail what HMRC does when it suspects someone of committing tax fraud. It explains what it means for you and what your rights are.