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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 when a denial of irregularities made in response to COP9

Where the taxpayer’s response to the offer of COP9 is to deny any irregularities there are some inevitable consequences:

  • The taxpayer will not be able to ask for another offer of a CDF.
  • They will not have the assurance of HMRC not conducting a criminal investigation for any frauds that are disclosed subsequently.

It is most unlikely that you will be able to fast track the investigation to an early settlement.

As soon as you receive the denial you should proceed as follows:

  • The denial should be acknowledged.
  • Where the denial includes an acceptable explanation, which points to the original suspicion of fraud being unfounded, then the case should be sent to the Authorising Officer with proposals for concluding the enquiry.
  • In all other cases the papers must be referred back to Criminal Investigation (CI) to reconsider their earlier decision.
  • If CI takes the case they will advise how matters should proceed from that point.
  • Where CI rejects the case you should proceed with a civil investigation.

Where the outcome is a civil investigation it is important to establish how the investigation should proceed - with or without their cooperation. In some cases it will be clear from the denial letter that the taxpayer wants to cooperate. A denial of fraud does not necessarily mean that a taxpayer will not cooperate with an investigation.

The first step is to write to the taxpayer (with a copy to their adviser) informing them of our decision. Unless it is clear from any contact that you might have had already, you should establish as soon as possible (with the taxpayer or their adviser) any specific reasons in support of the denial, or if they intend to make a disclosure of non fraud irregularities. Almost invariably the taxpayer should be invited to a meeting, where matters can be discussed and agreement reached about how the investigation will proceed