The UK's revenue agency is set to launch a new disclosure facility as it extends
its tax fraud crackdown.
The new Contractual Disclosure Facility (CDF) will launch on January 31, 2012,
with HM Revenue and Customs (HMRC) warning that it will introduce tougher procedures
for civil fraud investigations.
HMRC operates Civil Investigation of Fraud in order to address cases where
criminal investigation is not considered the most cost effective way to tackle
the fraud, or for situations where a prosecution is unlikely to be in the public
interest.
Under the new facility, taxpayers face a more lenient arrangement, whereby
they can avoid criminal investigation into suspected fraudulent activity. Using
the CDF, HMRC will inform a taxpayer in writing that they are suspected of
serious tax fraud, and offer them the opportunity to enter into a contract to
disclose that fraud within 60 days.
In return, HMRC will agree not to criminally investigate the taxpayer, removing
the risk of prosecution by HMRC. The investigation will then be carried out
using civil powers, with a view to a civil settlement for tax, interest and
a financial penalty.
However, HMRC has also clarified that those who choose not to make this commitment
will face a full investigation. In some cases, this may involve a criminal investigation
with a view to prosecution. In addition, a taxpayer who signs the contract,
but does not go on to admit and disclose fraud, will also face the possibility
of a criminal investigation.
HMRC will also permit taxpayers who are not under investigation, but want to
admit to tax fraud, to voluntarily request that HMRC consider their suitability
for a CDF contractual arrangement. HMRC will retain the discretion to decide
which cases are dealt with civilly, and which are investigated with a view to
criminal prosecution.
Launching the Contractual Disclosure Facility, Exchequer Secretary to the Treasury,
David Gauke, said: “This new facility is a valuable tool which will help
HMRC in its fight against fraud. HMRC will set out clearly what is expected
of taxpayers, and what will happen to fraudsters who choose not to disclose
their crimes.”
LAWANDTAX-NEWS.COM
