HMRC Unable To Disclose Number Of Civil Fraud Investigations

Only Six Taxpayers A Month Voluntarily Acknowledge They Have Committed Fraud Using HMRC Facility


David Shirt, Press Officer | 0161 838 3094

A HMRC facility which encourages people who have committed tax fraud to admit their offences in exchange for avoiding a criminal investigation has attracted 129 requests from individuals since it launched at the beginning of 2012.
Although the figures, which were obtained from HMRC by law firm Irwin Mitchell using the Freedom of Information Act, are equivalent to more than one request a week, a tax investigations expert at the national law firm says that there is a lack of transparency about the scheme, in relation to whether taxpayers are receiving the protection that they are looking for.

HMRC has been unable to disclose how many taxpayers were accepted into the process, and how many were subject to criminal investigation, despite making a voluntary approach to the taxman. HMRC is also unable to disclose the number of cases it has registered under the Contractual Disclosure Facility (CDF), because it appears that this information is not recorded centrally.

Established on 31 January 2012, the CDF enables a taxpayer to admit to fraud in exchange for immunity from prosecution, providing certain conditions are met. The process can either be initiated by HMRC, or a taxpayer can voluntarily ask to be admitted into the facility.
Up until now, HMRC has not published details of how many individuals have made requests. Following Irwin Mitchell’s request, it has been revealed that 65 people approached HMRC to enter the CDF from 31 January 2012 to 31 January 2013, and 64 between 1st February 2013 and 31st December 2013.
Phil Berwick, partner* at law firm Irwin Mitchell, said:

Launched by HMRC in 2009, the LDF allows taxpayers with unpaid tax to settle their liability with HMRC whilst avoiding a criminal investigation. In most circumstance, this is on very favourable terms when compared to using the normal  rules. In some cases, the HMRC foregoes some of the tax that is due and the penalty applied is usually lower than the amount charged outside the facility. The LDF closes to new registrations on 5 April 2016.