From 1 September 2005, HMRC is introducing a new Civil Investigation of Fraud procedure, supported by a new code of practice, that allows taxpayers a single opportunity to avoid the threat of prosecution for tax fraud by making a full disclosure of all irregularities within the direct and indirect tax regimes.

If a taxpayer decides not to make a full disclosure and co-operate, HMRC will conduct its own investigation, using statutory information powers if necessary. If irregularities are discovered, formal assessments will be issued and collection of unpaid tax with interest will be pursued. Any penalties due are likely to be significantly higher to reflect the fact that the taxpayer did not take the opportunity to make a full disclosure.

Once the decision has been made to follow a civil route for investigation and the procedure is offered to the taxpayer, HMRC is unable to prosecute for the original tax loss unless the disclosure turns out to be materially false.

...back to 8 September 2005


Sources:
New Civil Investigation of Fraud Procedures
Code of Practice 9 (2005)

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