The Contractual Disclosure Facility or CDF is the new way in which HMRC tackle suspected tax fraud.

The CDF facility provides an option for the taxpayer to declare all their tax irregularities and settle them along with interest and penalties.  In return HMRC will not bring criminal charges, provided the declarations under the CDF are complete and accurate.

We have seen a number of examples of HMRC applying the new CDF process recently.  It is important to note if the taxpayer does decide to make a detailed declaration that good consideration should be given the content of the “Outline Disclosure” that HMRC request within 60 days of their initial letter.   HMRC do put a lot of emphasis on what was said in the Online Disclosure during the rest of their investigation, in terms of penalties and threatening to bring criminal charges.

HM Revenue and Customs have launched a new amnesty for taxpayers suspected of committing serious tax fraud.
Under the Contractual Disclosure Facility (CDF), HM Revenue and Customs will write to taxpayers that are suspected of committing tax fraud to offer the opportunity to make a disclosure of unpaid tax liabilities within 60 days.  In return HM Revenue and Customs will agree not to pursue criminal prosecution against the taxpayer.
Taxpayers that have not yet been contacted by HM Revenue and Customs may voluntarily request to be considered for the CDF.  Alternatively those with offshore assets could consider registering under the Liechtenstein Disclosure facility (LDF).
For more information and advice regarding the disclosure of tax to HM Revenue and Customs please contact Paul Davison at Eaves & Co on 0113 2443502.