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HMRC internal manual

Fraud Civil Investigation Manual

Where CDF offer is made 30 June 2014 onwards: managing the detailed disclosure process: breakdown in the disclosure process

In some instances a customer may agree to produce a disclosure report but during the disclosure process they may fail to meet deadlines and there may be little evidence that any work has been undertaken (by the customer, or their adviser) to produce a report or schedule within the timescale agreed.

You must not allow excessive time to elapse. As soon as it becomes apparent that the customer will not meet the agreed disclosure timetable, you should give a strong warning that

  • the penalty reduction will be affected by delay, and
  • excessive delay will lead to HMRC taking over the investigation, with the potential for further consequences for the level of penalties.

Any assurances from the customer, or agent, that they will put things back on track should not be accepted at face value. You should tell the agent that from this point onwards you will monitor the case very closely to make sure that this is being done. At the first sign that this is not in fact happening you should write to the customer (with a copy to their agent) to express your disappointment and to advise them that - unless there are good reasons why you should not do so - you will be taking over the investigation forthwith.

For HMRC to hold off commencing its own investigation we need to be satisfied that matters are progressing towards a detailed disclosure in a reasonable period of time. The minimum assurances we would generally need are

  • a detailed disclosure with quantification within an agreed timetable
  • details of the evidence sources, and
  • a payment on account or a detailed reasonable explanation why payment is not possible at this time, with an expected timeframe for payment

With these assurances we should be able to agree to a sensible timetable for the submission of a detailed disclosure report. However, in appropriate cases, we would expect that more regular progress meetings will be held. When a detailed report is being compiled you should seek to be actively involved during this time to ensure that satisfactory progress is being made.

If necessary, for example the customer is not assisting with the production of the report within the agreed timetable, you should press for an opportunity to meet with the customer so that you can discuss your concerns with them and decide if you should take over the investigation.

Without such assurances it is difficult to be satisfied that matters are progressing towards the production of a detailed disclosure and we cannot remain inactive. We will therefore consider

  • preparing assessments and determinations, resisting postponement applications
  • commencing our own enquiries

If the customer declines to meet with you, write to them to explain your concerns.