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HMRC internal manual

Fraud Civil Investigation Manual

From
HM Revenue & Customs
Updated
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Where CDF offer is made up to 29 June 2014: general: general introduction to investigation of fraud

COP9 is HMRC’s main tool for investigating cases of suspected tax fraud using civil procedures. At certain points it also opens the possibility of a criminal investigation. This would be carried out by (not using COP9).

COP9 applies once it has been issued to the taxpayer, with an offer of a contractual arrangement and a covering letter.

Once COP9 has been the taxpayer they will have 60 days from the day from the day they receive it to choose one of three options. They can either:

  1. fully cooperate with the process, and accept the offer of a contract (The Contractual Disclosure Facility - (CDF))
  2. formally deny irregularities
  3. simply make no response at all.

If the taxpayer accepts the offer, they will have to produce an Outline Disclosure, within the same 60 day period. This will contain a brief description of the frauds they have committed, and a formal admission of deliberately bringing about a loss of tax. Once the Outline Disclosure has been made, the taxpayer will be required to make progress towards a “formal disclosure” including a Certificate of Full Disclosure, statement of assets and liabilities and certificates of accounts and cards operated. In most cases a Disclosure Report will need to be prepared and adopted first. The contents of the Outline Disclosure will be protected from any criminal investigation, under the terms of the contract. Once immunity from criminal investigation has been secured by an Outlined Disclosure, the taxpayer’s further cooperation is induced by the prospect of reduced penalties. If the taxpayer denies or makes no response, then HMRC will have the option of starting a criminal investigation. In most cases though, we will begin our own civil investigation, on the basis of non-cooperation. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)