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HMRC internal manual

Fraud Civil Investigation Manual

From
HM Revenue & Customs
Updated
, see all updates

Where CDF offer is made up to 29 June 2014: action following issue of Code of Practice 9: denial and no cooperation from taxpayer

Where:

  • following a denial and giving the taxpayer every opportunity to reconsider (see FCIM104060) the taxpayer maintains there is nothing to disclose
  • the taxpayer refuses to engage with your investigation and
  • even if the taxpayer claims to be co-operating, they decline to meet you to answer any factual questions or to provide you with any information that you require to investigate matters thoroughly

then you should request immediate access to business and private records. If this is declined the taxpayer should be told that where appropriate you will use statutory powers to obtain them. HMRC’s investigation must proceed and you must pursue the details and information that you need to investigate matters. The taxpayer has been given the opportunity to make a disclosure in response to COP9 and this has not been taken up.

In some cases, when faced with formal requests for information, the taxpayer might subsequently be prepared to cooperate and agree to meet with you to discuss matters. Where you get the chance to meet with the taxpayer and, despite you giving them every chance to tell you about any irregularities, they still maintain that there is nothing to disclose, then you should prompt the taxpayer about why you suspect fraud. The taxpayer might well agree that there are irregularities, but might consider that any irregularities are not due to deliberate/fraudulent behaviour.

How you proceed from that point must be judged on its own merits. However, advisers sometimes will say that even though their client has neither a fraud nor anything else to disclose they would still like to take the opportunity to check that nothing needs to be disclosed. They might therefore, with their client’s agreement, offer to prepare a report outlining what they have done and their conclusions. Whilst they can do so if they wish, the Investigator must not encourage or approve such action. The investigator must make it clear that HMRC is not suggesting that they do so and the cost of preparing this falls on the taxpayer. If the taxpayer is adamant that there is nothing to disclose (despite your prompting/telling them what you suspect) then the onus is on HMRC to prove our case. In this situation it is not for the taxpayer to prove that they have done nothing wrong. Where the adviser indicates that this is what their client would like to happen, you should press for a meeting with the taxpayer so that you can discuss your concerns with them and explain that they must bear the cost of providing any report.

You will need to adapt your approach depending on how the meeting is going, but usually it will still be possible to continue with the meeting - even though after prompting or challenging the taxpayer about the reasons behind your concerns they maintain that there is no disclosure to make. In these circumstances questions addressed to the taxpayer on their business and private affairs become particularly important. The general nature of the questions will follow the same pattern as outlined for disclosure cases, though the questioning should be adapted to the circumstances of the case and to the fact that a disclosure is not being made.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)