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January 2012

HMRC New Contractual Disclosure Facility launches 31 January

As part of the Government's commitment to tackle fraud, HMRC's new Contractual Disclosure Facility will be launched on 31 January 2012.

Under the new facility, HMRC will write to taxpayers to inform them that they are suspected of serious tax fraud, and offer them the opportunity to enter into a contract to disclose the fraud within 60 days.  In return, HMRC will agree not to criminally investigate them, 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.

Those who choose not to make this commitment will face a full investigation by HMRC.  And anyone who signs the contract, but then fails to go on and disclose fraud, will also face the possibility of a criminal investigation.

Taxpayers who are not under investigation, but who want to admit to tax fraud, may do so by filling out a form to voluntarily request that HMRC consider their suitability for a Contractual Disclosure Facility contractual arrangement.  HMRC still retains the right to decide which cases are dealt with under civil law, and which are investigated with a view to criminal prosecution.

Please do contact us if you would like to discuss this further.