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Warning on serious tax fraud crackdown

Wednesday 11th January 2012

HM Revenue & Customs is to introduce tougher procedures for civil fraud investigations later this month.

Its new Contractual Disclosure Facility forms part of the Government's commitment to tackle fraud.

Under the new facility, HMRC will contact a taxpayer, in writing, to inform them 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 to not criminally investigate, removing the risk of prosecution. 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 to not make this commitment will face a full investigation by HMRC - in some cases a criminal investigation with a view to prosecution.
Anyone who signs the contract, but does not go on to admit 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 fill out a form to voluntarily request that HMRC considers their suitability for a CDF contractual arrangement. HMRC still retains the discretion to decide which cases are dealt with civilly, and which are investigated with a view to criminal prosecution.

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."

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Mike Jones

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