Contractual Disclosure Facility
This facility will be offered to taxpayers when HMRC suspect that a tax fraud has taken place. Those wishing to own up to potentially fraudulent activity may also take advantage of the Contractual Disclosure Facility (CDF).
- HMRC is offering a new contractual disclosure facility CDF from 31 January 2012.
- If HMRC writes to an individual about a suspected tax fraud they will be offered the CDF.
- CDF can also be used by anyone who wishes to own up to tax fraud.
- CDF is only used for tax fraud: it does not apply to errors, mistakes or avoidance schemes.
If HMRC writes to a taxpayer because tax fraud is suspected and intends to investigate using Code of Practice 9, a CDF contract will be offered.
Under CDF there are 3 options:
- Owning up to fraud: the CDF route
- Deciding not to own up to fraud: the denial route
- Not replying to HMRC: the non-cooperation route
Under COP 9 HMRC will refrain from criminal investigation and prosecution provided that the individual makes a full disclosure. CDF ties together the disclosure process.
To use the CDF the individual must:
- Make a full and formal disclosure to HMRC within 60 days
- Sign a statement to say that you have provided accurate and complete details of the tax fraud
- Pay all taxes, duties, interest and penalties due
- Stop any fraud immediately