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Tax fraudsters can come clean and avoid criminal prosecution

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People suspected of serious tax fraud can come clean in exchange for not being criminally investigated and prosecuted under a new HMRC arrangement which came into force yesterday.

The contractual disclosure facility will mean when HMRC contacts someone they suspect of fraud, the option will be there to enter a contract to admit fraud and disclose details within 60 days to avoid criminal action. HMRC still intend to investigate using civil powers and settle outstanding bills as well as charging interest and penalties.

Treasury exchequer secretary David Gauke says: “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.”

Taxpayers not under investigation can also opt to volunteer information. HMRC says in all cases it reserves the right to decide which cases are dealt with on a civil basis and which are investigated with a view to criminal prosecution.

HMRC says those under suspicion who refuse to sign up to a CDF will face a full investigation by the taxman. and anyone who signs the contract, but does not go on to admit and disclose fraud, will also face the possibility of a criminal investigation.

The CDF is a result of an HMRC consultation launched last July.

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