HMRC has updated its civil investigation of fraud guidance (COP9) following a low key announcement that revisions to the contractual disclosure facility (CDF) procedure apply from 30 June 2014.
As readers will be aware, the CDF is designed to allow taxpayers who are suspected of fraud to avoid criminal prosecution if they make a full disclosure and reach a settlement on tax, penalties and interest. COP9 is the mechanism HMRC employs for investigating suspected fraud.
The amended CDF contains two fundamental changes, namely:
- removing the requirement to admit to behaviour HMRC may suspect to be fraud; and
- removing the “denial with cooperation” route.
This latest revision to COP9 and the CDF, demonstrates HMRC’s continuing appetite to toughen its stance on tax evasion.
Instead of references to “fraud” the guidance uses the term “deliberate conduct”. The distinction between the two is more semantic than substantive since a person admitting “deliberate conduct” is still admitting that he or she knew that their tax return contained incorrect information but that they failed to amend it, or that they failed to submit a return at all, knowing one was due.