HMRC offers disclosure facility to fraudsters

TAXPAYERS WHO ARE suspected of fraud by HM Revenue & Customs will be able to sign a contract to disclose the fraud in return for immunity from prosecution.

HMRC’s consultation document on its Civil Investigation of Fraud procedures proposes a contractual disclosure facility that will give individuals 60 days to disclose their fraudulent actions. The following investigation would be carried out using civil powers and the taxpayer would be required to pay the tax in full, with interest and a penalty.

If the taxpayer refuses to sign the contract, HMRC would undertake a criminal investigation with a view to prosecution.

Exchequer Secretary to the Treasury David Gauke said: “The Civil Investigation of Fraud procedure is an important tool for HMRC, producing many valuable disclosures every year.

“This proposal will help HMRC to ensure that the procedure is used in cases where taxpayers genuinely want to come clean. Appropriate action can then be taken sooner against fraudsters who do not choose to disclose their crimes.”

Gary Ashford, director of tax investigations at RSM Tenon, said the consultation was welcome. “We would like to ensure safeguards and a process to prevent HMRC withdrawing from the agreement unilaterally if the taxpayer is co-operating,” he added.


Related reading