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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: payments on account

In all cases where the indications are that there have been frauds or irregularities, the customer should be asked to consider making a general payment on account. It is the best way a customer can demonstrate their commitment to the COP9 process and to putting things right. This is a key element and must be encouraged in all cases.

Regular payments on account should be sought throughout your investigation, as and when any additional liabilities can be quantified with reasonable accuracy.

You should encourage the customer to make payment in full in advance by telling them that

  • this will be beneficial for them as it may stop further interest charges accruing
  • it may have a positive effect on any late payment penalties that are under consideration, see CH150000
  • the effort on their part to clear any debt at the earliest opportunity will help influence any request for time to pay that may subsequently be needed.

Where penalties are likely to be charged under ‘Old Penalties’ direct taxes legislation (for example TMA 1970, Finance Act 1998) you should warn that failure to make a payment on account may be taken into account in setting the penalty loading.

The payment on account should not exceed a reasonable estimate of the additional tax or other duties due. Customers must understand that a realistic payment on account is part of what is envisaged when a disclosure is made in response to COP9.

Where the customer does not have the immediate means to make a payment on account, then arrangements should be put in place to realise assets, to bring money back from offshore, raise money via loans etc as quickly as possible. In some cases a regular instalment may be arranged.

Provided the customer has a SAFE reference the facility exists to take payment over the phone on credit or debit cards.

In principle, any payments received should be dealt with in the following manner:

  • an acknowledgement of receipt should be given to the customer
  • if a payment is received in advance of any assessment being made forms will need to be completed, in accordance with guidance for each individual tax.

The payment, together with the completed forms, should be sent to Accounts Office, as detailed in SIOG10600.

Payments on Account are held on a ‘without prejudice’ basis.