Owner-Managed Businesses

Contractual disclosure facility

Produced by Tolley in association with Guy Smith of inTAX Ltd
  • 21 Mar 2022 07:29

The following Owner-Managed Businesses guidance note Produced by Tolley in association with Guy Smith of inTAX Ltd provides comprehensive and up to date tax information covering:

  • Contractual disclosure facility
  • Introduction
  • The scope of the CDF and COP9
  • What exactly is the CDF?
  • How does HMRC make contact?
  • What does the letter say?
  • CDF route
  • Non-cooperation route
  • What happens after the CDF route has been adopted?
  • The disclosure report
  • More...

Contractual disclosure facility

Introduction

The vast majority of HMRC enquiries, or ‘checks’ as they are now more commonly called, are carried out by staff in the network of tax offices across the UK. A formal notice is issued and the individual, sole trader, partnership or limited company is told which tax return is to be the subject of a check. Typically, the HMRC officer requests information to conduct the check, in order to confirm the accuracy and completeness of the tax return in question.

However, HMRC also has specialist teams conducting civil and criminal investigations, where it suspects serious tax fraud, involving direct and / or indirect taxes, has taken place. HMRC considers a tax fraud to involve an element of deliberate behaviour where, for example, there has been a failure to declare a tax liability, a concealment or withholding of information or a misrepresentation of facts.

HMRC’s regime for handling serious fraud cases is called the Contractual Disclosure Facility (CDF). Code of Practice 9 (COP9) governs how HMRC investigates suspected fraud and sets out the rules and conditions of the CDF policy. Under CDF, HMRC only guarantees not to prosecute where the person involved enters and fully complies with the terms on offer as part of the CDF.

Under CDF, the taxpayer has the following two options:

  1. to accept the CDF regime, ie admit to the fraud and make a full disclosure to HMRC, or

  2. not to cooperate with HMRC, in which case he has no protection against a criminal investigation

The scope of

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

There's no margin for error. Think Tax.
Think Tolley.

TolleyGuidance gives you direct access to critical, comprehensive and up-to-date tax information and expertise you can rely on.

TAKE A FREE TRIAL

Popular Articles

Calculating QIPs

This note provides details on how to calculate quarterly instalment payments (QIPs) for large and very large companies.The instalment amounts are based on the estimated corporation tax liability of the company’s current accounting period. Therefore, this means that large and very large companies

23 Mar 2022 10:52 | Produced by Tolley Read more Read more

Close companies

Generally speaking, inheritance tax (IHT) is charged only on transfers of value by individuals and trusts. However, to prevent avoidance of the tax, the charge is extended to participators in close companies where:•a close company makes a transfer of value, or•the share capital or loan capital of a

23 Mar 2022 10:53 | Produced by Tolley Read more Read more

Property partnerships

OutlineFor income and capital gains tax purposes, partnerships are regarded as being tax transparent ― ie they are not taxed in their own right but instead taxation is applied to the partners.Accordingly, if the partners are individuals, then much the same considerations apply as for an individual

23 Jun 2022 10:24 | Produced by Tolley Read more Read more