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The Revenue is proposing to tighten the undertaking of its civil investigations of fraud by offering suspected tax cheats the opportunity to enter into a contract to divulge the details of wrongdoing.
Under the contractual disclosure facility (CDF) covered in a discussion document published today, individuals believed to have committed serious tax fraud would be invited to come forward within 60 days in exchange for an agreement by HMRC not to undertake a criminal investigation, removing the risk of prosecution by the taxman.
An inquiry would then be carried out using only civil powers, with a view to a settlement for tax, interest and a financial penalty. Anyone who signed the contract, but did not go on to admit fraud would face the possibility of a criminal investigation.
The CDF is intended to better focus the paths of civil investigations and their criminal equivalent, activity in which the Revenue is currently increasing with the reinvestment received following the government’s spending review of last October – but the department operates civil procedures to address cases in which criminal scrutiny is not considered the most cost-effective approach, or for situations in which a prosecution is unlikely to be in the public interest.
The Exchequer secretary to the Treasury, David Gauke, said the latest proposal in the fight to retrieve unpaid taxes ‘will help HMRC to ensure that the [civil investigations of fraud] procedure is used in cases where taxpayers genuinely want to come clean.’
