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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: incomplete Outline Disclosure received

The Outline Disclosure is an essential part of the Contractual Disclosure Facility (CDF). Failure to make an Outline Disclosure means that the contractual undertaking has not been met.

If the Outline Disclosure you receive does not include the suspected tax frauds then you should regard this as an incomplete disclosure and refer the case back to FIS (Crime). FIS (Crime) will then reconsider the case and either

  • adopt the case for criminal investigation with a view to prosecution, or
  • return the case for investigation under COP9.

The Outline Disclosure must be acknowledged using the standard letter in SEES. This letter explains that it is being considered and the customer will be advised of the outcome in due course. Whilst the case is being considered by FIS (Crime) no further action should be taken which might prejudice any criminal investigation.

If FIS (Crime) decide a criminal investigation is not appropriate at that time then you must write to the customer, and their agent, using the standard letter in SEES to tell them that

  • you are not satisfied that a complete disclosure has been made, and
  • you will proceed by conducting an investigation under COP9.

The letter reminds the customer that the terms of the CDF apply only to the admissions contained in their Outline Disclosure. Failing to include a fraud that they are later found to have been involved in may result in

  • a criminal investigation with a view to prosecution of that fraud, or
  • significantly higher financial penalties, and
  • the potential publication of their details.

You will need to decide how the investigation should proceed.

You may decide to invite the customer to a meeting where matters can be discussed and agreement reached about how the investigation will proceed. This could result in a number of possible outcomes, for example, the customer

  • may admit to additional liabilities and commission a full report covering that which is included within the Outline Disclosure and that outside, on the understanding that those additional frauds are outside the terms of the CDF
  • does not cooperate resulting in HMRC conducting its own investigation into the additional suspected frauds.

You would expect the customer to provide information about their part in the affairs covered in the outline disclosure, without the need for information notices. They may choose to do this in a disclosure report.

If during the course of a civil investigation you obtain evidence that the customer has

  • made a materially false statement, or
  • produced a materially false document

with the intent to deceive, then you must suspend your civil action and refer the case back to FIS (Crime).

If FIS (Crime) wish to criminally investigate the non-disclosed frauds, you must email the COP9 centre and seek advice before proceeding with the civil element of the case.