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HMRC internal manual

Fraud Civil Investigation Manual

Where CDF offer is made up to 29 June 2014: action following issue of Code of Practice 9: action following the issue of opening letter

Once the opening letter, COP9 and offer of a contract etc have been issued, the taxpayer has 60 days from the date that they receive the letter to either respond or choose to ignore the offer.

Following the issue of the opening letter HMRC will not enter into any discussions with the taxpayer (or their appointed agent or adviser) about the reasons behind our concerns, or about any aspects of the person’s tax affairs which could fall within the scope of our investigation. This is because such a discussion could prejudice the course of a criminal investigation.

The period of silence will end after a decision has been made, which can only be after one of the following points:

  1. A valid contract (CDF) is created.
  2. HMRC receives a denial of any irregularities and the case is not taken up by Criminal Investigation (CI).
  3. The taxpayer signifies that they are not going to cooperate and the case is not taken up by CI.
  4. 60 days passes from the date that the taxpayer received the opening letter etc and the case is not taken up by CI.

A taxpayer can only choose one option: take up the offer of a CDF, deny irregularities, or not cooperate. Taking up the initial offer of a CDF is the only way that the taxpayer can be certain that HMRC will not pursue a criminal investigation of the tax frauds that are disclosed.

If after receiving a denial, the taxpayer or their adviser - inside the original 60 day time limit - seeks a contract, this should not be dismissed out of hand. Whilst we can not allow further time (beyond the original 60 days) unless there is good reason to do so (see FCIM104020), provided they fulfil the terms required to enter into a CDF contract this should be accepted. This is because we want as many people as possible to use the CDF. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)  

If the taxpayer does not manage to fulfil the terms for CDF then HMRC will proceed on the basis that a denial has been made in response to the offer of a contract. However, in this type of situation the taxpayer will still be able to cooperate with our enquiries and reduce any penalty, but they will do so without the absolute assurance that HMRC can not start a criminal investigation.