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HMRC internal manual

Fraud Civil Investigation Manual

Where CDF offer is made 30 June 2014 onwards: action following issue of Code of Practice 9: checking validity of the Outline Disclosure

An Outline Disclosure form and guidance notes are issued with the opening letter. You must only accept a Disclosure drafted using the template in SEES forms and letters, substitutes cannot be accepted.

All forms received must be checked on receipt to make sure the acceptance and Outline Disclosure are valid. You must make sure all forms have been completed fully and correctly, signed by the customer and received within the 60 day time limit.

There may be several reasons why the Outline Disclosure may be invalid, such as:

  • An acceptance letter is received without the Outline Disclosure.
  • The Outline Disclosure is received without the acceptance letter.
  • There is a flaw in the paperwork - perhaps a missing signature.
  • The customer’s response is ambiguous - for example, the Outline Disclosure contains the admission of deliberate action leading to a tax loss but there is something elsewhere in the narrative that appears to contradict it.
  • The letter of acceptance and outline disclosure are returned outside the 60 day response period.

Any other omissions, such as not making a payment on account or not including any non-deliberate behaviour, do not make the outline disclosure invalid, but would need to be addressed as part of the ongoing investigation.

If the Outline Disclosure appears to be invalid and you are within the 60 day period, you must contact the customer, or their agent, as soon as possible to recify any errors.

If there is sufficient time the customer may be able to send a revised or updated form; provided that can be completed correctly, signed and submitted within the original 60 day time limit. You must not extend the time limit to allow for obvious errors and mistakes to be corrected as this would not be classed as a good reason to extend the 60 day limit.

If the acceptance is received separately you must check this quickly to make sure any errors or omissions are corrected within the original 60 day limit. Typical errors or omissions may be:

  • the wrong signature
  • no signature
  • no date indicated.

In most cases it will be clear if the acceptance of the offer of a contract and the Outline Disclosure have been received within 60 days. If you are uncertain whether a timely reply has been received you should check the date of delivery and any other information available to you to help you decide if the contract is valid.

The 60 day time limit must only be extended with the written approval of the Authorising Officer, and that officer will need to be satisfied that there is a good reason to do so. Good reason will normally be an unexpected or unusual event, either unforeseeable or beyond a person’s control, which has prevented them from responding in time. It does not include a situation where a customer has not reacted quickly enough to the offer and runs out of time.

If the customer accepts the offer but denies deliberate behaviour, either in a letter or other accompanying documentation, you should contact them to explain the terms of the CDF, if you are still within the 60 day period. If not, then this should be treated as a rejection of the offer.

In these circumstances the customer has lost their opportunity to gain an assurance that HMRC will not undertake a criminal investigation with a view to prosecution.

If a timely acceptance letter has been received but the Outline Disclosure has not been received within the 60 day limit then you must proceed on the basis that the customer has rejected the offer.

If you receive any new evidence indicating that the original suspicion of fraud is unfounded then you must refer the case to the Authorising Officer with proposals for concluding the enquiry.

In all other instances where an invalid disclosure is received you must refer the case back to FIS (Crime) for them to reconsider their earlier decision.

If FIS (Crime) accepts the case they will advise how matters will proceed.

If FIS (Crime) rejects the case then you must investigate under the terms of COP9 and if any new evidence emerges then you may refer back to FIS (Crime) again.

If the customer, or their agent, contacts you before all documents relating to the disclosure are received, for example:

  • after the letter of acceptance has been received, but a valid Outline Disclosure has not
  • the outline disclosure has been received but the letter of acceptance has not

you must not engage in any discussions about the grounds for your suspicions.