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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: managing the detailed disclosure process: taxpayer reluctance to provide a disclosure report

When a taxpayer is reluctant to instruct their adviser to prepare the disclosure report or fails to provide their adviser the information that is required, each case must be judged on its own particular circumstances to decide how we believe our investigation can best be brought to a satisfactory conclusion.

Sometimes the taxpayer, after making an outline disclosure, might hesitate to instruct an adviser to prepare a more detailed disclosure report. They might, for example, argue that:

  • HMRC can very quickly see for themselves the amounts that are involved and reach agreement.
  • they do not have the means to meet the professional fees of a detailed report.

We cannot compel a taxpayer to commission a detailed report, but in some cases it might be appropriate to refer the taxpayer again to the Code of Practice 9, and their commitment to make a full disclosure of all irregularities.

If the taxpayer still declines to instruct an adviser to investigate, but offers full facilities for investigation, they should firstly be invited to:

  • quantify the disclosure, setting out the period involved
  • complete, to the best of their knowledge and belief, a statement of assets and liabilities and certificates of bank accounts and credit cards operated
  • bring these in within a brief agreed period with a narrative description of the tax fraud and how the fraud was perpetrated
  • show in sufficient detail how they quantified the irregularities
  • make a commitment to pay and make a payment on account (if one has not been made at that point)
  • include a declaration that the disclosure is full, accurate and complete.

The investigator should then consider taking up the access and cooperation offered, so that they can investigate the matter in more detail.

In other cases although a detailed report has been commissioned, you might find that it is not being progressed satisfactorily, because the taxpayer has not been providing the cooperation that the agent needs to complete it. If this happens you should write to the taxpayer immediately (with a copy to the agent) to draw their attention to the potential implications. The level of contact with the taxpayer or taxpayer’s representative will depend on the individual circumstances of the case, but the emphasis is on robust case management. Investigators should consider taking over the investigation in all cases where the taxpayer is not cooperating fully to produce the detailed report within the agreed timescale.