HMRC has updated the terms of its Contractual Disclosure Facility (CDF)

What do these changes mean?

These changes have certainly strengthened HMRC’s position in relation to CDF disclosures; by placing additional contractual obligations on individuals in order to receive the protection from criminal prosecution, which the CDF provides. 

Meeting with HMRC

The most notable change for many will be HMRC formalising their preference for taxpayers to attend meetings as part of the CDF process. Going back many years, taxpayer meetings with HMRC were previously an integral part of the CDF process. However, in more recent years we have concluded a number of CDF cases, promptly and successfully, without the need for taxpayers to attend a meeting with HMRC.

While in some cases such meetings can be beneficial, in our experience, they can also often be an unnecessarily stressful experience for the taxpayer without significantly helping HMRC in progressing the case.

It will remain to be seen how HMRC will implement this new obligation in practice. Interestingly HMRC’s new guidance remains silent with regards to taxpayers with specific needs, such as health concerns for example. We would expect HMRC to take such matters into account where a meeting with HMRC would not be suitable.

Repaying liabilities

Ensuring that any settlement terms are fully adhered to when agreeing to a payment plan will now be vitally important. Taxpayers will therefore need to be confident that they can realistically afford any such payment plan agreed with HMRC.

Do I need representation? Should I engage a tax investigations specialist?

Absolutely. HMRC’s own CDF guidance advises individuals to engage specialist representation. 

Given the potentially increased risk of HMRC seeking criminal prosecution, in our view, it has never been more important to engage a tax investigation specialist for those who either wish to make a voluntary COP9 disclosure via the CDF or receive a letter from HMRC, which states it suspects them of tax fraud. 

How we can help

Should you or your client wish to take advantage of the terms of the CDF, in order to received guaranteed protection against criminal prosecution, we can ensure that all of the contractually required obligations are fully met. We will also work with you and any existing advisor to prepare a suitable valid Outline Disclosure, within the required timeframe in order to enter into the CDF.

Should a meeting with HMRC be necessary our team, which includes ex-HMRC Fraud Investigation Service Officers, will fully prepare you for the meeting, attend the meeting with you, ensuring that your rights are protected and that HMRC correctly follows its own processes.

We will consider your personal circumstances and where necessary make representations to HMRC in terms of attending meetings. In addition, we will negotiate settlement terms on your behalf to ensure HMRC are not enforcing an unfair repayment period for you, and that all your financial circumstances are fully understood and factored into any time to pay arrangement.