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HMRC internal manual

Fraud Civil Investigation Manual

Where CDF offer is made 30 June 2014 onwards: pre-authorisation review and action: first party contact and uplifting of records

When reviewing any case you must always be mindful of the risk of the ‘loss’ of any vital evidence in advance of contacting the customer or their representative.

If it appears that your case would be irreparably damaged by the absence of certain documentary evidence, then it may be necessary to arrange an advance visit to the customer and, if the visit maintains your concerns, to use the appropriate statutory powers in order to secure the relevant books and records.

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

From 1 April 2009, the appropriate statutory power is at paragraphs 10 and 16, Sch36 FA 2008. It applies for the purposes of all taxes except excise duties. Technical and operational instructions on the use of this power and the safeguards you must follow are in the Compliance Handbook. See the guidance at CH20000 for information and inspection powers.

When examining or removing records you must take care you do not give an impression that you have already decided that an offence has been committed. Whilst you may properly say that you have concerns over the accuracy of the returns submitted, and are accordingly taking away documents to consider further, it is of paramount importance that you can demonstrate that you have used your powers because

  • the documents and information you are requesting are reasonably required to check a tax position, or
  • the inspection being carried out is reasonably required to check a tax position.

At the same time you must also show that you retain an open-mind and that there may be an innocent explanation for any discrepancies.

If your examination of the records does not provide an innocent explanation for your suspicions, it is reasonable to tell the customer that you will write to them in due course to invite them to attend a meeting.

This applies even if, in a particular situation on an advance visit, the customer demands an immediate explanation of your concerns or a discussion regarding the reasons behind any apparent discrepancies. Even if you feel that, on the face of it, there would be benefit in resolving matters ‘there and then’, you should not be drawn into doing so. You must be mindful that there could well be other tax regime issues that are not apparent at the time. Furthermore, any discussions (particularly if the customer does not have proper representation or advice to hand at the visit) must be handled correctly in accordance with the Human Rights Act and you must not say anything that could prejudice a criminal investigation.