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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 on receipt of the Outline Disclosure

Provided we are satisfied that it has been sent on time and it has been completed correctly (including being signed by the taxpayer and dated) we will review the details in the disclosure. You should submit the case to the Authorising Officer (AO) with your recommendations on how you see the case progressing from that point.

Usually, there will be two options:

  • It covers the frauds we suspected (and may include other frauds as well).
  • You suspect that it is incomplete.

If the Outline Disclosure includes all the frauds you suspected, then you may conclude that the taxpayer has met his initial obligation under the CDF. Subject to the approval of the AO, you should write to notify the taxpayer that the Outline Disclosure has been accepted for the purposes of the contractual arrangement. Where a valid Outline Disclosure has been made:

  • The taxpayer has our absolute assurance that they will not face a criminal investigation for what they have disclosed in their Outline Disclosure.
  • We cannot give the taxpayer any such assurance for any fraud that has not been included in their Outline Disclosure.

When writing to the taxpayer you should not indicate that you accept that the Outline Disclosure covers the full extent of outstanding liabilities. The process leading up to formal disclosure is required to give us assurance on that point.

If the Outline Disclosure does not include the suspected tax frauds, your recommendation should be that the case must be referred back to Criminal Investigation (CI). CI will then reconsider matters and either:

  1. Adopt the case for criminal investigation with a view to prosecution.
  2. Return the case for civil investigation.

The Outline Disclosure should be acknowledged with a note that it is being considered and they will be advised of the outcome in due course. Whilst the matter is with CI for their consideration no other action should be taken which might prejudice any Criminal Investigation.

If CI decide that a criminal investigation is not appropriate then the first step is to write to the taxpayer (with a copy to their adviser) to tell them that you are not satisfied that a complete disclosure has been made, but that you will proceed by way of a civil investigation with a view to concluding a civil settlement. As such the requirements of the Police and Criminal evidence Act (PACE) do not apply.

In most cases you will want to invite the taxpayer to a meeting where matters can be discussed and agreement reached about how the investigation will proceed. There will be a number of possible outcomes. These range from the taxpayer commissioning a full report, to a customer failing to cooperate resulting in HMRC conducting its own investigation.