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HMRC offers “stay out of jail” disclosure facility for tax fraudsters
Yorkshire chartered accountants Watson Buckle are urging clients to come clean over alleged tax fraud following the launch of a new disclosure facility by HM Revenue and Customs.
HMRC is giving possible tax fraudsters the opportunity to own up to their misdemeanours without facing criminal proceedings.
Coming into affect at the end of the month, the contractual disclosure facility (CDF) will see HMRC write to taxpayers they suspect have committed tax fraud.
HMRC will offer individuals a CDF contract and three options – sign an acceptance letter, rebuff the allegations by signing a denial letter, or do not reply through a disclosure form.
Individuals will also be given a copy of Code of Practice 9 – the Revenue’s guidance on tax investigations.
The tax authority will not enter into a criminal investigation if individuals enter into a CDF contract.
In return, the taxpayer in question will be forced to:
- Reveal details of all tax deliberately evaded, with no exceptions, within 60 days of being offered the contract;
- Sign a statement to say they have provided accurate and complete details of the fraud;
- Pay all taxes, duties, interest and penalties due; and
- Stop all fraudulent behaviour immediately.
John Kinsella, tax partner at the Bradford-based practice said: “This formal disclosure process will be the only way by which a client can admit to fraud without HMRC launching an official criminal investigation.
“Those who take advantage of the disclosure facility will also likely to be on the receiving end of lower penalties.
“I would urge anyone who thinks they may have misled HMRC, whether on purpose or by accident, to consider speaking to their accountant about signing up to this scheme to avoid criminal proceedings.”
Any individual who have been contacted by HMRC will have 60 days to disclosure any fraud, during which period they will not be contacted by the department – however as part of HMRC’s legal obligations, tax officials will still be able to take action against goods the taxpayer owns, start or continue debt collection or any other action needed.
Individuals not under investigation, but who may want to admit tax fraud, can contact HMRC requesting consideration for a CDF contract.
However in these circumstances, HMRC retains discretion to decide which cases are dealt with as civil cases, and which will be investigated as part of criminal proceedings.
For more information visit www.experttaxinvestigator.com.
