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HMRC internal manual

Fraud Civil Investigation Manual

Where CDF offer is made 30 June 2014 onwards: penalties and settlement of cases: authorising the basis of settlement

Before the investigation can be concluded the Authorising Officer (AO) must approve the basis on which it will be concluded - either formally or by contract.

A single report (covering indirect and direct taxes) should be prepared setting out the facts, evidence established and conclusions reached during the investigation, so that the AO can agree the basis of settlement.

The penalty position should be considered separately by making a report to the AO. All penalties must be agreed and approved by the AO. You must not enter into any discussions about the level of penalties until the AO has been consulted.

The rules about how to calculate the penalty will depend on the head of duty involved and the period, or periods, the fraud occurred. See FCIM209020 for guidance on the different penalty regimes.

Regardless of which penalty regime applies, the customer’s behaviour and the level of cooperation given throughout the investigation will affect the amount of the final penalty. It is important that you record evidence of the customer’s behaviour and cooperation throughout your investigation.